Nvidia targets commercial PCs 14 May, 2006 By Steve Wexler

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"We're going after a market we haven't been playing with before," he said. "Intel has been doing very well in that commercial market, and it's about time they had some competition."

Nvidia is targeting the small-medium business, government and education desktop PC market, through the channel, he said. "We're going to enable them to compete with Tier1 vendors like Dell. This platform is designed to help them better compete."

According to Ragones, this opens up an opportunity of approximately 20 million Intel-based units annually. Nvidia is working closely with AMD, leveraging its initial participation in the CPU vendor's commercial stable image platform (CSIP) program, which debuted earlier this year. AMD has been eating away at Intel's domination of the PC market and these initiatives open the door for more competition.

Commenting on the CSIP program, Rob Enderle principal analyst for the San Jose, Calif.-based Enderle Group, told eChannelLine in February he expected a positive response from systems builders.

"On the Intel side, you would think they can offer a better quality experience because they are building all of that stuff. On the AMD side you would think they would be able to provide a better value because it is competitive at all levels [of components]." So far, AMD is winning the perception battle, he added.

At the center of Nvidia's value proposition is the ability to lower IT costs by improving PC manageability, said Ragones. Significant IT resources are required to keep the PCs across an organization synchronized, up-to-date, and secure. Quoting Gartner data, he said managing Windows XP PCs can slash 37% off of costs versus unmanaged PCs.

Nvidia's Business Platform leverages AMD's CSIP together with its manageability features -- including remote boot, restart and shutdown, unified driver architecture and a comprehensive certification program. Over the last couple of quarters Nvidia has been signing up the majority of the 20 largest system builders worldwide. While it will continue signing up new system builders who can take a self-certification program, the next phase is to generate end-user demand, said Ragones.

"We're really creating a comprehensive ecosystem," he said. "We're really creating that for a system builder to go head to head with a tier 1 like Dell."

Only time will tell if Nvidia will be successful in this initiative, but based on its latest results, the company will give it a good shot. For the first quarter of fiscal 2007, revenue increased to a record $681.8 million, up 17 percent from a year ago. Net income was $90.7 million, compared to $64.4 million.

"We experienced growth in each of our businesses -- GPU, MCP, handheld GPU, and consumer electronics -- resulting in record revenue for the first quarter," stated Jen-Hsun Huang, president and CEO of Nvidia. "We also entered multiple new product cycles during the quarter, continuing our leadership in each of the markets we serve. As we move further into the new fiscal year, the growth drivers we outlined at our Analyst Day in March, which include the adoption of Microsoft Vista, high-definition video, and the launch of the Sony PlayStation 3, will continue to accelerate and give us the opportunity for another strong year of growth."

With files from Paul Weinberg.