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Q2 2012 Earnings Call
August 11, 2011 5:00 pm ET
Karen Burns - Interim Chief Financial Officer
Jen-Hsun Huang - Co-Founder, Chief Executive Officer, President and Director
Rob Csongor -
Craig Berger - FBR Capital Markets & Co.
Rajvindra Gill - Needham & Company, LLC
Shawn Webster - Macquarie Research
Uche Orji - UBS Investment Bank
Glen Yeung - Citigroup Inc
Christopher Muse - Barclays Capital
Daniel Berenbaum - MKM Partners LLC
Hans Mosesmann - Raymond James & Associates, Inc.
Harlan Sur - JP Morgan Chase & Co
Vivek Arya - BofA Merrill Lynch
Christopher Caso - Susquehanna Financial Group, LLLP
Kevin Cassidy - Stifel, Nicolaus & Co., Inc.
Ambrish Srivastava - BMO Capital Markets U.S.
Previous Statements by NVDA
» NVIDIA's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» NVIDIA's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» NVIDIA Q1 2011 Earnings Call Transcript
Thank you. Good afternoon, and welcome to NVIDIA's conference call for the second quarter of fiscal 2012. In addition to Karen Burns, our Interim CFO, with me on the call today is our new Vice President of Investor Relations, Rob Csongor. Rob is a longtime veteran of NVIDIA and one of our original employees. He joined our company in 1995, and has since ran product marketing, launching our first product, NV1, was GM of our embedded business, and in 2003, I asked him to start our notebook GPU business.
Our notebook GPU business is now approaching $1 billion a year and has just had a record quarter. Over the last 5 years, he was our VP of Corporate Marketing, responsible for many of the company's marketing initiatives. I'm very excited to welcome Rob to his new role, where he will bring his knowledge of NVIDIA and to serve the investor community and communicating the company's growth strategies.
Please join me in welcoming Rob to his new job. With that, I would like to turn the call over to Rob to begin our summary of second quarter of fiscal 2012.
Thank you, Jen-Hsun. After our prepared marks, we'll open up the call to a question-and-answer session. Please limit yourself to one initial question with one follow-up question.
Before we begin, I'd like to remind you that today's call is being webcast live on NVIDIA's Investor Relations website, and is also being recorded. A replay of the conference call will be available via telephone until August 18, 2011, and the webcast will be available for replay until our conference call to discuss our financial results for our third quarter of fiscal 2012. The content of today's conference call is NVIDIA's property and cannot be reproduced or transcribed without our prior written consent.
During the course of this call, we may make forward-looking statements based on current expectations. These forward-looking statements are subject to a number of significant risks and uncertainties, and our actual results may differ materially. For a discussion of factors that could affect our future financial results and business, please refer to the disclosure in today's earnings release, our Form 10-K, for the fiscal period ended January 30, 2011, and the reports we may file from time to time on Form 8-K filed with the Securities and Exchange Commission.
All of our statements are made as of today, August 11, 2011. Based on information available to us as of today, and except as required by law, we assume no obligation to update any such statements. Unless otherwise noted, all references to market research and market share numbers throughout the call come from Mercury Research or Jon Peddie Research.
With that, let's begin. Our GPU business was strong in Q2, driven by our record quarter for notebook products. Despite typical seasonal weakness in the PC market, we recorded record notebook GPU revenue, increasing our notebook GPU market share by 9% to 50.6% according to Mercury Research.
We launched the GeForce GTX 560M into the heart of the notebook gaming markets, delivering DirectX 11, 1080p gaming, and Optimus technology to notebooks for the first time ever. Optimus Technology optimizes your notebook performance by intelligently delivering power when you need it and conserving it when you don't, completely automatically.
In addition, we launched the world's fastest notebook GPU, the GeForce GTX 580M. The GeForce GTX 580M, along with NVIDIA and Optimus technology, delivers 5 hours of browsing battery life and 100 frames per second performance in Call of Duty: Black Ops.
While our desktop GPU business decreased within typical seasonality, overall desktop GPU attach rate of consumer PCs remained strong at 55%. We added 2 new desktop products targeted at the sweet spot of the gamer market. First, the GeForce GTX 560 into the extremely popular $199 segment of the desktop gamer market. And secondly, launching new 3D Vision wired glasses, delivering the best 3D PC experience at a new affordable price of $99.
The Sandy Bridge transition continues to drive growth for our discrete GPU business. According to Mercury Research, integrated CPU eroded integrated graphics chipset market share, while discrete GPU attach rates remained constant overall. GPU attach rates actually increased in notebook, from 33% to 36%. Notebook discrete GPU shipments were up 6.7%. Industry press is confirming what we had expected, that while Sandy Bridge graphics still won't come anywhere near the performance of a discrete GPU, according to Tom's Hardware, the combination of a Sandy Bridge CPU with NVIDIA discrete GPU, delivers the best price performance solution for the PC market.