Based on the following comment I decided to do a little math:
<<Howse claimed that last year more than 70 percent, or 5.8 million units, of the graphics boards sold in retail used 3dfx's chip.>>
Now 5.8M Voodoo1, Voodoo2 and Voodoo Banshee boards sold is really respectable.
Assuming an ASP of approx. $175 per board (which is probably low as Voodoo2's were selling for $299 through the end of summer), that means Voodoo-based retail sales were approx. $1B last year.
Boardmakers of course don't capture all of this, retail markups are in the 20% range I believe. So we have $800M in Voodoo board sales.
Games are more complex now and computer unit sales continue to increase at high clip. So lets say that industry retail sales increase say 20%. This brings sales back up to $960M.
Now much of these sales were driven by Creative and Diamond's existing strength in the channel where STB hasn't been strong in the past. Capacity may also be a short-term issue but at 500K boards a month, STB can crank out 6M boards this year. Therefore Voodoo sales this year may only be 1/2 that of last year. Sales go to $480M.
Competition is stronger this year. Even TNT couldn't knock Voodoo2 (SLI) down last year. TNT2 Ultras look to be as strong as Voodoo3. (I'm not making any assumptions about next generation cards here.) This could decrease sales another 10%. Sales drop to $430M.
Now this is a yearly figure so divide by 4 (I'm assuming no seasonality which we all know does exist!). Sales are $105M/qtr.
Some common sense checks are in order here.
STB's total sales were $65M in 1Q99 (a seasonally good time of year) so my $105M/qtr is probably a poor estimate especially considering the disruption switching over to 3Dfx caused. Then again a new, until-now uncontested product could caused a 50% jump in sales for a quarter. Due to the last release of Voodoo3 in the quarter I would say that 2Q99 revenues of $65M is reasonable and expect it will grow to $80M in 3Q99 assuming at least one major OEM deal.
Now on Jan 31, 1999 STB had $51M in inventories, lets say 50% finished TNT boards for its OEMs, the rest material to ramp up production of Voodoo3's. The TNT inventories meant that STB has about 72 days worth of TNT sales at the end of the quarter. A month later Diamond announced it had "captured" OEM deals from STB for its TNT boards. Since we can assume that STB didn't want to anger its customers nor continue supporting Nvidia and its customers wanted STB's boards at a discount, I am hazarding a guess that all TNT inventory was sold prior to end of 2Q99 (approx $25M). This means that Voodoo3 sales had to be almost $40M in just three weeks. Is this reasonable? Using an average wholesale ASP of $120, this means that STB would have had to sell 333K Voodoo3 boards in just 21 days. This is only slightly over half of one month's capacity of STB's factory in Mexico so it is within capacity constraints. Now we also know that 3dfx has been saying that sales were brisk AND that it was available in over 9000 retail locations. This would mean that on average each retail location would need to sell 37 Voodoo3 in just 21 days. Unreasonable? Surely NOT!
I'd love to start discussing margins but have to get to bed. Tune in tomorrow for my continuing (VERY ROUGH) analysis of the combined company.
Obewon |
