NVIDIA 2007 Annual Report Download - page 38

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with
“Item 1A. Risk Factors”, “Item 6. Selected Financial Data”, our Consolidated Financial Statements and related Notes thereto, as well
as other cautionary statements and risks described elsewhere in this Annual Report on Form 10−K, before deciding to purchase, hold
or sell shares of our common stock.
Overview
Our Company
NVIDIA Corporation is the worldwide leader in programmable graphics processor technologies. Our products are designed to
enhance the end−user experience on consumer and professional computing devices. We have four major product−line operating
segments: the graphics processing units, or GPU Business, media and communications processors, or MCP Business, Handheld GPU
Business, and Consumer Electronics Business. Our GPU Business is composed of products that support desktop personal computers,
or PCs, notebook PCs, professional workstations and other GPU−based products; our MCP Business is composed of NVIDIA nForce
products that operate as a single−chip or chipset that provide system functions, such as high speed storage 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, or PDAs, 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 for 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.
Original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, add−in−card manufacturers, system
builders and consumer electronics companies worldwide utilize NVIDIA processors as a core component of their entertainment and
business solutions. Our GPUs are designed to deliver superior performance and crisp visual quality for PC−based applications such as
manufacturing, science, e−business, entertainment and education. Our MCPs perform highly demanding multimedia processing for
secure broadband connectivity, communications and storage. Our handheld GPUs deliver an advanced visual experience by
accelerating graphics and video applications while implementing design techniques that result in high performance and relatively low
power consumption.
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.
Seasonality
Our industry is largely focused on the consumer products market. Due to the seasonality in this market, we typically expect to see
stronger revenue performance in the second half of the calendar year related to the back−to−school and holiday seasons.
Fiscal 2007 Developments, Future Objectives and Challenges
GPU Business
The combination of our GeForce 6, GeForce 7 and GeForce 8 series of GPUs and our Scalable Link Interface, or SLI, technology
has created a new class of gaming PCs and professional workstations. SLI technology takes advantage of the increased bandwidth of
the peripheral component interconnect, or PCI, Express bus architecture to allow up to four NVIDIA−based graphics cards to operate
in a single PC or up to two NVIDIA−based graphics cards to operate in a notebook PC or professional workstation.
During the first quarter of fiscal 2007, we shipped eight new GeForce 7 series GPUs for desktop and notebook PCs, expanding
the offering of products in the GeForce 7 GPU family. In March 2006, we shipped our first Quad SLI system for desktop PCs,
enabling the use of four GPUs per system. We also shipped the GeForce Go 7800 GTX notebook GPU featuring SLI technology for
notebook PCs. 31
Source: NVIDIA CORP, 10−K, March 16, 2007