Nvidia's Partners Aren't Too Worried About The New Cards

Nvidia next week plans to offer more details of its partnership with Best Buy, under which the chipmaker is selling its own branded GTX 460 and GeForce GTS 450 graphics cards at prices ranging from $125 to $250.

Known for designing reference architectures for GPUs, Nvidia now is building its own GTX 460 and GeForce GTS 450 graphics cards and making them available at Best Buy as of the end of last week.

While Nvidia has partnered with retailers including Best Buy in the past, it normally leaves the task of building and packaging the actual chips to partnering manufacturers, including Asus, PNY, and EVGA.

In addition, Nvidia partners with a number of system builders who deploy the end product for customers -- which won't happen if the cards are sold at Best Buy. Despite the potential for channel conflict, several sources contacted by CRN downplayed the significance of the Best Buy deal.

"As far as I know this is not the first time that they are selling their products to the likes of Best Buy, though in the past they have sold them under their partners' names," said one system builder, who requested anonymity. "It should have more impact on manufacturers themselves. This should not come as a surprise since a lot of manufacturers are going direct."

Next: How This Might Affect Resellers

As for the possibility that this could be a threat to resellers, the system builder said, "Resellers need to stay alive in the market place by offering good value. A lot of end users just want to have a card and the box it comes with. They don't want to go through the hassle of dealing with other accessories and applications."

The source also raised the possibility that Nvidia may be exploring alternative distribution methods to boost sales.

"It may be that Nvidia is trying to ramp up their numbers. It's a difficult economy. Everyone is trying to generate more revenue," the source said.

Nvidia specializes in designing GPU architectures, but this seems like the kind of shift in strategy that might have been worth an official announcement. Instead, word came from customers browsing through the aisles at Best Buy.

Nvidia on Tuesday confirmed that it's working with Best Buy. "Nvidia and Best Buy are working together to offer PC customers the opportunity to experience firsthand the latest in PC technologies right inside Best Buy stores," Nvidia said in a statement.

Next: Nvidia Assures Its Partners

Nvidia also clarified that it's not seeking direct competition with its partners: "As part of this broad initiative, Nvidia is supplying to Best Buy specific GeForce models built and supported by Nvidia. These products will only be available at Best Buy and will complement GeForce products from our partners."

Pressed for further details, an Nvidia spokesperson told CRN that the company will reserve further comment on the matter until next week.

Another source, who also requested anonymity, said it's too early to tell at this point whether the Best Buy relationship is part of Nvidia's strategy or just a short-term arrangement. "This may or may not mean a shift in their strategy; it may not even be around next quarter. It might be to fill a gap or win some more real estate in the retail space."

So what would need to happen for this to threaten Nvidia's partners?

"I think it’d be more of a story if they were doing a top-to-bottom product launch at retail, but we’ll see," the source said. "I think at $299 for a GTX 460 there is a lot of room for their partners to make sure they are differentiating themselves and keeping high standards in terms of features, bundles, packaging, and support.’