NVIDIA- Dwinlding Profoits despit the new 55nm transition

NVIDIA's third-quarter profits for 2009 dropped around 20 percent, from $1.12 billion in 2007 to $897.66 million 2008, as reported on Ars Technica. In addition to dwindling profits, operating expenses increased 16 percent, over the same quarter in 2007, due to additional R&D spending. While NIVIDIA was still profitable for Q3 of 2008, net income of the company dove sharply from 235.7 million in 2007 to 61.7 million in third quarter 2008. Year to date, NVIDIA's revenue is up two percent for 2008 over 2007, but the company's cost of revenue is up approximately $330 million or 21 percent over year to date figures in 2007.

The increase cost of revenue and slumping profits come despite the transition to the 55nm architecture that is ongoing for the current line of the 9400 GT, 9500 GT, and the 9800 GT/+ graphics cards-- a transaction that comes with a slight increase in performance, and a significant decrease to manufacturing costs. At the same time, the transition of these graphics cards to 55nm architecture has been significantly downplayed in the market, possibly due to the fact that these models in the 65nm architecture are abundant in the market place due to decreased sales year to date.

For consumers, this elicits a warning; if you're in the market for new NVIDIA cards shop with caution. The 9400 GT, 9500 GT, and the 9800 GT/+ mid range graphic cards are available in to versions, with the 65nm and 55nm architecture- don't settle for the lesser of the two, and a higher power consumption rate because you didn't do you're homework. At the same time, the entire GTX 260 and 280, lines of GPU's are not being manufactured in 55nm's, so shop with caution.

With the increased spending in R&D, NIVIDIA has poised itself for a successful jump in the upcoming quarters, however little information could be found about upcoming launches andthe next line of GPU's. At this time, with the confusion between the two architectures flooding the market and with overall performance of the current lines of NVIDIA's GPU's in respect to their competitor, upgrading your graphics card with a new NIVIDA card should be approached with caution. Unless you're looking for the best buy in a mid range card, die hard NVIDIA fans should hold off, and those with no allegiance to the manufacturer should stay clear.