Market focus
The boom in graphics cards
Despite the economic slowdown, the graphics card segment is expected to grow at 30 percent annually with increasing multimedia content and growing customer awareness
By Priyanka Chowdhury
 Over the past few years, India has not only seen an increase in the gaming population but also in the use of graphics card-intensive programs. This in turn has helped the add-on or discrete graphics card market to thrive.
“The discrete graphics card market has been growing at 30 percent since the past one year,” says Kapal Pansari, Director, Marketing, Rashi Peripherals, who also handles XFX graphics cards. “Last year, we sold an average of 40,000 units of discrete graphics cards per month through the channels, and we expect this demand to gain momentum and grow faster than the PC market.”
In agreement is Rajshekhar Bhatt, National Sales Manager, ATI product line chipset business, AMD. “Over the last couple of years we have seen the graphics card market grow tremendously. The world economy may be at risk, but the graphics chip market is literally on fire with more than one graphics card now being used in over a third of all PCs shipped. A study conducted by Mercury Research revealed that in Q3 2008 a total of 112.4 million graphics cards were shipped, recording an increase of 19.5 percent over Q2 2008. Out of this, over 70 percent of the cards were sold through channels, while the remaining 30 percent went to PC OEMs.”
Along with the demand for graphics cards, the attach ratio of a graphics card to a PC has also witnessed significant growth. According to Daniel Saison, Director, Sales, MEIA, Nvidia, “The current attach ratio of a graphics card with respect to PC sales is over 25 percent. Compared to other countries where the attach ratio is around 50 percent, India has a long way to go, but we are expecting the attach ratio to reach 50 percent in the next two years.”
Adds Vinay Shetty, Country Head, Component Products, Asus, “With new gaming consoles, games and gaming zones sprouting, there is no doubt that the gaming segment is definitely picking up in India. However, the enthusiast segment still has a long way to go. Out of the entire demand for discrete graphics cards, we have noticed that 80 percent comes from the mainstream, 15 percent from performance and 5 percent from the enthusiast segment. Mains-tream graphics cards are priced between Rs 900 and Rs 3,000, performance cards cost between Rs 3,000 and Rs 6,000, while cards for the enthusiast segment are priced Rs 30,000 onward.”
Increasingly, more consumers are not only opting to shift from an integrated graphics card to a discrete graphics card, but also from mainstream graphics cards to performance cards. Says Deepak Gupta, Country Manager, Zotac, “Consumers are no longer satisfied with having a mainstream graphics card in their systems. With extreme graphics being used in almost all areas, consumers want to experience the best of graphics and are therefore shifting from the mainstream to the performance segment. Out of the 30,000 discrete cards that we sell every month, we usually see a demand of over 5 percent from upgrades.”
Growth drivers
With Intel’s advanced chipsets already providing integrated graphics cards, these cards have become a standard component in most PCs. However, these integrated cards have the capacity to run only regular applications, and can’t provide the high-definition visuals and performance that a discrete graphics card provides. Hence, with consumers demanding high-quality content on their computers, discrete cards are selling fast.
According to many, Vista’s Aero interface has helped to increase the demand for discrete graphics cards. “With Aero demanding a minimum of 1 GHz CPU, 1 GB RAM, DirectX 9 graphics, 128 MB memory and 512 MB graphics interface, one would require a discrete graphics card to see the real performance of a Vista Premium Ready PC,” explains Gupta. “Another operating system which is expected to boost the discrete graphics card segment is the new OS, Windows 7.”
Entertainment is also a driver for graphics cards in the home segment, especially among the urban middle- and upper-middle class. Consumers nowadays are looking at the PC as not just a computing device but also as an entertainment device; they often prefer to watch high-definition movies and play games on it. Many applications such as Adobe Reader, Google Earth and Picassa also work better if a graphics card is installed in the PC. Thus, the discrete graphics card, which was once considered a gamers component, has also entered the traditional arena as people realize the untapped power of the card. Consumers are opting for an added graphics card in their PCs because they now understand that they can boost their overall PC viewing experience by simply adding another graphics card to their PCs.
There is another driver. Many movies nowadays have a lot of visual effects, for which the core element is the graphics card. For instance, many production houses are required to work on software such as Adobe Photoshop, Corel, Flash and Avid that require the use of graphics cards to give enhanced 3-D and special visual effects. Other professional applications (like animation software Maya) are also fuelling growth. Thus, performance graphics cards that are 96GTX and beyond are being used in these organizations. “Visually-intense Web 2.0 technologies, the corporate use of streaming video, Web conferencing, tele-presence solutions, video and still image, and 3D gaming are also helping to propel the growth of the graphics card,” points out Bhatt. “BPO is another segment which has emerged as a big industry in the country. With services such as Web site design, animation and engineering services being outsourced to India, the demand for graphics cards has shot up.”
Challenges and trends
The challenge that partners in India face is convincing consumers that a graphics card can be used for more than just playing games. “Consumers have this negative perception that a graphics card needs to be added to a PC only if you want to play games. They don’t realize that it has more uses and adds more benefits to their PCs. Not only can a graphics card improve the life of a PC, it also improves performance, which in turn lowers the total cost of ownership of the PC. The negative perception among consumers is the only thing that is hampering the growth of the graphics card,” comments Pansari.
Says Saison of Nvidia, “A big market for integration is there in MIDs, smartphones, netbooks and nettops. Consumers are increasingly becoming aware of these segments, and are opting to buy netbooks and nettops due to their lower cost. This is expected to lead to an increase in the adoption of ARM architecture cards like Tegra and ION.”
The market is also seeing shifts in demand. “While most of the demand comes from metros, we have noticed that with the growth in PC penetration in smaller cities, the demand for graphics cards is also increasing there,” says Pansari.
Clearly, even in the midst of the general slowdown, some segments will continue to flourish and the graphics cards segment is one of them. |