Laptop Slowdown Hits Q3 Graphics Shipments

A slowdown in laptop sales has hurt the market for graphics processors, with shipments growing more slowly than expected in the third quarter, analyst firm Jon Peddie Research said on Monday.

Graphics product shipments totaled 116 million units, a 10 percent increase compared to the third quarter last year. But shipments were down 1 percent sequentially as demand for PCs weakened, affecting graphics vendors such as Nvidia and Advanced Micro Devices.

"It's the first time we've seen a decline from the second quarter to the third quarter," said Jon Peddie, president of Jon Peddie Research.

Graphics product shipments were expected to grow more quickly as markets recovered from the recession. But demand is increasing at a slow rate because consumers are being cautious with purchases, Peddie said.

Nvidia was hit by higher memory costs and slower demand for laptops in developed markets. In late July the company reduced its revenue forecast for its fiscal second quarter partly due to a shift among consumers to lower-cost, integrated graphics processors, which reduced demand for Nvidia's discrete graphics cards.

Intel benefited from 50 percent growth in shipments of integrated graphics processors between the second and third quarters. That raised its market share to 55.6 percent in the third quarter, up from 53.4 percent in the quarter before. Intel introduced new processors for laptops and desktops in January that include the CPU and GPU in a single chip.

Nvidia's market share fell year-over-year as AMD also gained from the shift to lower-cost components. Nvidia held a 21.2 percent market share, a drop from its 25.3 percent last year. AMD was in the second spot with a 22.3 percent market share, compared to a 20.1 percent market share last year.

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