NVIDIA 2006 Annual Report Download - page 47

Handheld GPU Business. Handheld GPU Business revenue was $58.7 million for fiscal 2006, compared to $45.9 million for
fiscal 2005, which represents an increase of 27.9%. The overall increase in Handheld GPU Business revenue is due to an increase in
average selling prices of high−end feature phone products and revenue recognized as a result of a development contract.
Consumer Electronics Business. Consumer Electronics Business revenue was $170.2 million for fiscal 2006, compared to $260.0
million for fiscal 2005, which represents a decrease of 34.5%. The decrease in our Consumer Electronics Business is a result of
decreased and discontinued sales of our Xbox−related products to Microsoft, partially offset by revenue recognized from our
contractual arrangement with SCE. During the first quarter of fiscal 2006, Microsoft indicated that it would not order any more
Xbox−related products from us after our second fiscal quarter. As a result, the second quarter of fiscal 2006 was the last quarter during
which we recognized revenue from the sale of our Xbox−related products to Microsoft. During fiscal 2006, we recognized $49.0
million of revenue from our contractual arrangements with SCE to jointly develop a custom GPU incorporating our next−generation
GeForce GPU and SCE's system solutions in SCE's PlayStation3. No such revenue was recognized during our fiscal 2005 as our
definitive agreement with SCE was not executed until the first quarter of fiscal 2006.
Fiscal Year 2005 vs. Fiscal Year 2004
Revenue was $2.0 billion in fiscal 2005, compared to $1.8 billion in fiscal 2004, which represented an increase of 10.3%. Fiscal
2005 was a 53−week year, compared to fiscal 2004 which was a 52−week year.
GPU Business. GPU Business revenue increased by 7.1% to $1.4 billion for fiscal 2005 compared to $1.3 billion for fiscal 2004.
The increase was primarily the result of increased sales of our NVIDIA Quadro professional workstation products in fiscal 2005,
which was due to unit sales volume increases, and an increase in average selling prices as a result of increased board sales. Notebook
GPU sales increased in fiscal 2005 as a result of sales of our GeForce FX Go notebook GPU products outpacing the decline in our
older notebook GPU product lines during the period. Sales of desktop products increased in fiscal 2005 as a result of a significant
increase in sales of our high−end desktop products, offset by a slight decrease in mainstream desktop products. High−end desktop
sales increased in fiscal 2005 primarily due to unit volume increases primarily related to our GeForce 6800 and 6600 products. The
decrease in mainstream desktop sales in fiscal 2005 was mainly due to competitive pricing in the mainstream segment offset by the
ramp of product sales of our GeForce 6200 with TurboCache technology during the fourth quarter of fiscal 2005.
MCP Business. MCP Business revenue increased by 8.1% to $175.7 million for fiscal 2005 compared to $162.4 million for fiscal
2004. The increase in MCP Business revenue is due to increased sales of NVIDIA nForce3 and NVIDIA nForce4 products. NVIDIA
nForce4 products began selling during the fourth quarter of fiscal 2005. This increase was offset by a decrease in sales of NVIDIA
nForce2 products.
Handheld GPU Business. Handheld GPU Business revenue increased by 409.7% to $45.9 million for fiscal 2005 compared to
$9.0 million for fiscal 2004. The increase in handheld GPU sales in fiscal 2005 was primarily due to our acquisition of MediaQ, Inc.
in the third quarter of fiscal 2004, which represented our initial entry into the handheld segment and to sales of our GoForce 4000
product.
Consumer Electronics Business. Consumer Electronics Business revenue decreased by 7.2% to $260.0 million for fiscal 2005
compared to $280.1 million for fiscal 2004. The decrease in our Consumer Electronics Business is due to unit sales volume increases
offset by a lower average sales price. Sales of our Xbox products historically fluctuated based on the timing of orders from Microsoft.
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