Three smart consumer electronic devices released for the 2013 Holiday Shopping Season attracted very favorable reviews. Sony manufactures the PlayStation 4. Microsoft manufactures the remaining 2:
- XBox One
- and the Surface 2
But all 3 of these devices were sold out for most of this Christmas season. As of my last check, back on December 6, 2013 all 3 were apparently sold out everywhere.
Note: last weekend, on December 15, 2013, My local BestBuy had inventory of the XBox One.
Another note worth considering: I spoke with the Microsoft Online Store crew back on December 6, 2013. They told me the Surface 2 would be back in stock on December 14, 2013. To the best of my knowledge this new inventory never showed up. Once again, my trip to BestBuy on December 15, 2013 produced an availability date in mid January 2014 for the Surface 2.
AMD manufactures the 64 bit Jaguar CPUs and the Radeon graphics GPUs powering both the PlayStation 4 and the XBox One. The huge demand for both of these devices may translate into some good news on the actual volume of units AMD will be able to sell, for the first year, into this market.
The actual profitability of these sales is a point of discussion among AMD analysts. Nevertheless, the Q3’13 AMD CFO Commentary includes the following point worth considering: “Graphics and Visual Solutions (GVS) segment revenue was $671 million, up 110% compared to the prior quarter, driven by our semi-custom business.
- GVS segment revenue was up 110% sequentially due to Sony and Microsoft next generation products”
Tegra CPUs power the Surface RT (Tegra 3) and the Surface 2 (Tegra 4) Microsoft tablets. NVidia manufactures these CPUs. Recent positive press reception of the Surface 2 product, together with generally favorable early consumer reviews, may fuel more demand for the Surface 2 tablet than analysts have estimated. Of course, if this proves to be true, then NVidia’s shipment volume for Tegra 4 chips may exceed analyst estimates.
But I also need to note comments made during NVidia’s latest quarterly earnings report, where management disclosed tighter margins for the Tegra chips. So greater volume should not be construed, necessarily, as an indicator of greater profitability. Nevertheless, the chip should attract added interest from other OEMs, as a result of the explosive market interest in the Surface 2. There is still room for competitive tablets and other touch screen driven computing devices in this consumer market.
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