AMD’s deal with Apple
In December 2013, AMD (AMD) announced that Apple (AAPL) used its dual FirePro professional graphics processing units (or GPUs) in its Mac Pro. Apple’s graphic cards are designed by AMD. Each Mac Pro ships with two FirePro D300 or D500 GPUs. HP’s (HPQ) ZBook 14 mobile workstations also use AMD FirePro™ professional graphics. Leading players are adopting AMD’s products. Apple is known for its high price and high margin products. This shows that AMD is establishing its presence in the market.
Apple’s Mac Pro is in the $3,000–$4,000 price range. The dual D300 GPUs, in the lower-priced Mac Pro, are worth ~$1,200. The D500 GPUs power the higher-end version of the desktop. They’re valued at $2,500.
The MacPro’s current waiting time is five to six weeks. This indicates high demand among users. In 2013, Jon Peddie Research estimated that ~4.9 million professional graphics processors were sold. In 2013, AMD shipped 0.98 million professional GPUs. It commanded 20% of the market. According to DigiTimes, the deal with Apple would increase AMD’s professional GPU market share to 30% by the end of 2014.
Nvidia poses stiff competition
In the past, Apple chose between Nvidia (NVDA) and AMD graphics for its hardware requirements. Nvidia’s Quadro series is successful. It’s considered the company’s cash cow. As part of its restructuring strategy, AMD identified “professional graphics” as a key growth market.
Intel (INTC) is another leading player in graphic chip market. According to Jon Peddie Research, AMD’s competitive pricing and improved hardware helped it increase its market share in the professional graphics market from 12% in 2009 to 25% in 2014.
AMD’s continued investment in the professional graphics market has shown results. Its performance in professional graphics improved. Professional graphics played an important role in driving AMD’s growth in the last few quarters.
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