Nvidia (NVDA) makes chips that help run graphics on PCs. Most of its business has been aimed at high-end computers. Intel (INTC) makes chips that have a graphics capacity built in. According to The Wall Street Journal "the two successful chip makers historically have led separate niches." Nvidia plans to change that.
New Nvidia chips will target "down-market" PCs, those in the $500 range. The sales figures for these machines are much higher than the $1,000 plus machines where Nvidia has had much of its past success.
Nvidia’s move is brilliant. It already has the R&D capacity to make these products and has obviously created a lower cost version of a set of chips which is already highly regarded by PC makers. While Intel’s chips have some of the same capacity, it does not have the "gold standard" reputation in graphics that NVDA has had for some time.
Nvidia has very little to lose and a great deal to gain. Most of its at Intel’s expense.
Douglas A. McIntyre
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