NVIDIA’s growing interest in selling add-in-board graphic cards is troubling its distributors.
Earlier the brand would distribute its reference design for add-in-board graphic cards through a group of companies in the market. This graphic cars would be used in the company’s graphic processors.
However, with the launch of GeForce GTX 1070 and GeForce GTX 1080 add-in-board graphics cards, the company changed its strategy to reach the customers.
Instead of pushing themselves through market vendors, who were earning a lot from it, NVIDIA decided to sell the add-in-boards directly through online marketing.
This somewhat unusual act of marketization affected the business of vendors like ASUSTek, Gigabyte Technology, MSI, EVGA, and others.
Critics argue that the earlier strategy by the company has been very sensible as NVIDIA would generate the reference design graphic card to be brought to the market through others and would stop its series production once others are able to place theirs. This strategy did not harm the profitability of either.
However, these companies would earn as much as US $159.9 annually, which attracted NVIDIA to jump into the business.
And obviously it raised the company revenue from $495 million to US$ 1.2 billion on GAAP basis, which has clear potential to hit more high targets.
It will not only give the company an opportunity to make relationship with the customers but also to cut a slice of profit share from others.
It seems NVIDIA would not stop selling the Founders Edition graphics card, however would allow the add-in-boards to showcase the variants till a limited time of guarantee periods.
Because, the company has been using such tactics in the past as well.
And this time they have rather opted better options to exercise favourable strategic and risk management techniques.