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Silicon providers main beneficiaries of enthusiast PC growth; opportunities exist for vendors to raise profits with innovative products, says HWinsights
Press release, June 23 [Tuesday 23 June 2015]

The rapid expansion in demand for premium PC hardware from the enthusiast and overclocking segments has given hardware vendors a much needed opportunity to bolster declining sales in the mainstream consumer space. But while related players have all enjoyed some gains from their efforts to design and market products primarily for overclockers, the main winners so far have been the chip providers. In first-quarter 2015 the cost of the CPU and graphics card accounted for over 66% of the EUR1050 (US$1151) cost of a typical overclocking system, according to the latest quarterly report from HWinsights.

In first-quarter 2015, the cost breakdown of a typical overclocking system was EUR330 (31%) for the CPU, EUR365 (35%) graphics card, EUR150 (14%) motherboard, EUR75 (7%) RAM, and EUR130 (12%) PSU, HWinsights noted.

For high-end systems the cost of the CPU alone accounted for 42% of the total system price, making Intel, which enjoys an enthusiast PC market share of 78%, the major beneficiary of the overclocking boom.

"In the years we have been tracking the market, we have seen overclocking evolve from originally appealing to budget conscious consumers looking to squeeze out additional performance for their dollar, to the current situation where it represents a premium category that sits at the very top of vendors' price scales," said Pieter-Jan Plaisier, Director, HWBOT. "When leveraged effectively, targeting the overclocking market not only allows vendors to maximize their margins, it also has the effect of adjusting upwards consumer price expectations in other product segments, in particular gaming."

A rising tide lifts all boats

This effect of a premium product helping to push up prices for a vendor's other product lines was recently observed with the introduction of the GeForce GTX Titan series by Nvidia.

With an MSRP of $999, the first Titan, released in February 2013, set a new benchmark for the most expensive single-GPU card on the market. As a result, Nvidia's next-generation high-end gaming product, the GeForce GTX 780 was generally regarded as offering a good price/performance ratio, despite the fact it was priced at US$649, compared to US$500 for the previous-generation GeForce GTX 680.

HWinsights believes there is opportunity for vendors in other hardware categories to push the price envelope if they are willing to challenge consumer expectations with more value-added features and new innovations.

However, to be successful vendors cannot simply expect the market to settle for higher numbers for existing features, HWinsights warned. Attempts by PSU vendors to woo enthusiasts with 1000W+ models have been largely ignored, the firm noted. Even at the top end of the charts where cost is typically not a concern, data still show a high number of users are still opting for more modestly priced 850W models, HWinsights said.

HWinsights: NVIDIA single-GPU card pricing

Series

Launch MSRP (US$)

Launch date

GTX 280

649

Jun-08

GTX 285

399

Jan-09

GTX 480

499

Mar-10

GTX 580

499

Nov-10

GTX 680

500

Mar-12

Titan

999

Feb-13

GTX 780

649

May-13

GTX 780 Ti

699

Nov-13

Titan Black

999

Feb-14

GTX 980

549

Sep-14

Titan X

999

Mar-15

GTX 980 Ti

650

Jun-15

Source: HWinsights, compiled by Digitimes, June 2015

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