Discrete Desktop GPUs are for Gamers
Discrete desktop GPUs are standalone graphics cards purchased primarily by PC enthusiasts and gamers so they can get superior graphics performance from their PCs. We estimate that about 75 million discrete desktop GPUs will be sold in 2009 constituting about 38% of all desktop GPUs. The rest of the desktop GPU market is attributable to integrated GPUs which are lower-end GPUs that are integrated into existing PC components (like a motherboard).
Nvidia and AMD Dominate the Market
Nvidia and AMD dominate the discrete GPU market today and Intel's delay in launching a competitive product will help them maintain share while developing the next generation of GPUs.
Intel wants to build GPUs the way it builds PC processors
Intel is keen to influence the GPU market since it expects that there will be convergence in capabilities between graphics processors and PC processors over the long run. Intel's expertise is in designing x86 central processing units (CPUs) found in many PCs today but not used in GPUs. The company's goal is to construct graphics processors that use Intel's x86 processors and can compete effectively with AMD and Nvidia.
Nvidia benefits from Intel's stumbles
Nvidia is the largest beneficiary of Intel's stumbles. The discrete desktop GPU business is Nvidia's second most valuable business constituting about 12% Nvidia's stock. In comparison, we estimate that discrete desktop GPUs constitute about 3% of AMD's value.
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