Intel Experiences Welcome Victory in Critical Context
Intel's year has been quite challenging. Their initiative to establish a top-notch foundry business has been sluggish in yielding outcomes, increased spending on AI infrastructure has dampened demand for server CPUs, the PC sector isn't bouncing back as vigorously as expected, and Intel's in-house AI chip progress is falling short of expectations.
On top of these challenges, the company announced a round of massive layoffs in the beginning of the year to cut costs and had to suspend its dividend. The former CEO, Pat Gelsinger, unexpectedly decided to retire, leaving Intel's overall strategy in doubt. However, Intel was able to secure substantial funds from the CHIPS act to support its manufacturing endeavors, a rare positive development for the company in the past year.
As 2024 draws to a close, Intel has one more piece of good news: Its second-generation discrete graphics cards seem to be a success, at least compared to its initial attempt. After working diligently for two years to rectify the multitude of issues that marred its market entrance, Intel now appears to have a successful product on its hands.
Selling out swiftly
The Verge reported on Tuesday that Intel's B580 graphics card, priced at $249 and often outperforming more expensive options from both Nvidia and AMD, is selling out at retailers. A quick check on Amazon reveals that ship dates for the card have been pushed back to January, and it's currently out of stock on Newegg.
An Intel spokesperson told The Verge that demand for the B580 has been robust and many retailers have sold out of their initial stock. The company expects to provide weekly restocks of the Limited Edition version that it sells directly.
Investors aren't privy to the exact quantity of stock initially available, so no definitive conclusions can be drawn regarding sales volume. However, this is a welcome departure from the norm.
Intel introduced its first-gen A-series graphics cards towards the end of 2022. They showed promise, but software glitches and immature drivers drove potential buyers away. Since then, Intel has significantly improved the software situation with regular updates, and it appears that this has been enough to persuade gamers to give its products another try.
Targeting the mid-range segment of the market, while not as lucrative as the high-end, is a smart move. The $200 to $300 range has been neglected for several years, and there's a sizable number of PC gamers with aging mid-range cards ready for an upgrade. Based on Steam's hardware and software survey, some of the most popular graphics cards among Steam players include Nvidia's GTX 1060, GTX 1650, RTX 2060, GTX 1050 Ti, and GTX 1660 SUPER, all of which are several generations old.
Disrupting the market
Intel's A-series graphics cards failed to alter the landscape of the graphics card industry. The company's market share remained inconsequential, as software issues proved to be insurmountable. This time, however, Intel has largely resolved its software issues and delivered sufficient performance at an affordable price, offering PC gamers a compelling alternative to Nvidia and AMD.
Intel is likely not done with its B-series family, with the potential for higher-end and lower-end graphics cards to launch next year, along with the upcoming B570, priced at $219. The company will have to compete with new graphics cards from Nvidia and AMD, both of which are expected to announce their next-gen products soon.
Intel may finally achieve what it aimed for in 2022 with its foray into the graphics card market: Disrupt a duopoly and offer a third choice for PC gamers. With almost everything else going wrong for the company, the graphics card business could be a rare bright spot as it limps into 2025.
In light of Intel's success with the B580 graphics card, investors are keenly watching the company's financial performance in the upcoming quarters, hoping that this positive trend will boost their returning on investment. Furthermore, Intel's ability to compete effectively in the mid-range market segment, often neglected by competitors, has the potential to significantly impact its finance and overall financial health.
