NVIDIA 2006 Annual Report Download - page 8

Overview
Our Company
NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. Our products enhance the
end−user experience on consumer and professional computing devices. We have four major product−line operating segments:
graphics processing units, or GPUs, media and communications processors, or MCPs, Handheld GPUs, and Consumer Electronics.
Our GPU Business is composed of products that support desktop personal computers, or PCs, notebook PCs and professional
workstations; our MCP Business is composed of NVIDIA nForce products that operate as a single−chip or chipset that can off−load
system functions, such as audio processing and network communications, and perform these operations independently from the host
central processing unit, or CPU; our Handheld GPU Business is composed of products that support handheld personal digital
assistants, cellular phones and other handheld devices; and our Consumer Electronics Business is concentrated in products that support
video game consoles and other digital consumer electronics devices and is composed of our contractual arrangements with Sony
Computer Entertainment, or SCE, to jointly develop a custom GPU incorporating our next−generation GeForce GPU and SCE's
system solutions in SCE's PlayStation3, sales of our Xbox−related products, revenue from our license agreement with Microsoft
Corporation, or Microsoft, relating to the successor product to their initial Xbox gaming console, the Xbox360, and related devices,
and digital media processor products. We were incorporated in California in April 1993 and reincorporated in Delaware in April 1998.
Our headquarter facilities are in Santa Clara, California. Our Internet address is www.nvidia.com.
Original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, add−in−card manufacturers, system
builders and consumer electronics companies worldwide utilize NVIDIA digital media processors as a core component of their
entertainment and business solutions. Our award−winning GPUs deliver superior performance and crisp visual quality for PC−based
applications such as manufacturing, science, e−business, entertainment and education. Our critically−acclaimed MCPs perform highly
demanding multimedia processing for secure broadband connectivity, communications and breakthrough audio functions. Our
handheld GPUs deliver an advanced visual experience by accelerating graphics and video applications while implementing design
techniques that result in high performance and low power consumption.
Our Business
GPU Business
The combination of the programmable GPU with Microsoft's, DirectX 9.0 high−level shading language is known as DirectX 9.0
GPUs. The flexibility and power of DirectX 9 GPUs can enhance high−definition, or HD, digital video, image processing and editing
for digital photographs, as well as bring a “cinematic look” to computer graphics. Technology and market leadership in this generation
of GPUs continues to be a key element of our corporate strategy. The successful production launch of our GeForce 6800 and 6600
GPU series in fiscal 2005 led to our increase in market share from 21% to 67% of the Performance DirectX 9.0−compatible graphics
controller segment, according to the Mercury Research Fourth Quarter 2003 and 2004 PC Graphics Reports, respectively. In fiscal
2006, our strategy was to extend our architectural and technology advantage by leading the industry with our second−generation GPU
to support DirectX 9 Shader Model 3.0 − the GeForce 7800 GPU. By successfully extending our leadership position in the
performance segment with the production release of the GeForce 7800 in June 2005, we grew our market share from 67% to 79%,
according to the Mercury Research Fourth Quarter 2004 and 2005 PC Graphics Reports, respectively. In January 2006, we launched
and initiated sales of the GeForce 7300 GPU, our first mainstream version of the GeForce 7 Series. The GeForce 6 and 7 Series
desktop and notebook GPUs are designed to be compatible with Microsoft's next generation operating system, Microsoft Windows
Vista, or Vista, which is scheduled to be released in the second half of calendar 2006. Vista is expected to mark a dramatic
improvement in the way the Windows operating system takes advantage of the PC's GPU to provide a positive user experience.
The NVIDIA Quadro brand has become the benchmark of performance and compatibility for the professional industry. During
fiscal 2006, the growth in our Quadro professional workstation products was a reflection of the digital revolution sweeping nearly
every industry, from industrial design, to industrial styling, to film, to HD broadcast, to medical imaging and many more. In the future,
we expect the growth of our professional workstation products to be influenced by the demand for HD content creation, HD video
editing and HD broadcast.
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