NVIDIA 2005 Annual Report Download - page 11

Our objective is to be the leading supplier of performance GPUs, MCPs and WMPs for a broad range of desktop PCs, workstations,
notebooks, video game consoles, Internet appliances, handhelds and any future computing device with a display. Our current focus is
on the desktop PC, workstation, notebook PC, servers, mulitmedia−rich cellular phones and video game console product lines, and we
plan to expand into other product lines. Our strategy to achieve this objective includes the following key elements:
Build Award−Winning, Architecturally−Compatible 3D Graphics, High−Definition Video, Media Communications and Ultra−Low
Power Product Families for the PC, Handheld and Digital Entertainment Platforms. Our strategy is to achieve market share
leadership in these platforms by providing award−winning performance at every price point. By developing 3D graphics,
high−definition video and media communications solutions that provide superior performance and address the key requirements of
these platforms, we believe that we will accelerate the adoption of 3D graphics and rich digital media.
Target Leading OEMs, ODMs and System Builders. Our strategy is to enable our leading PC, handheld and consumer electronics
OEMs, ODMs and major system builder customers to differentiate their products in a highly competitive marketplace by using our
digital media processors. We believe that design wins with these industry leaders provide market validation of our products, increase
brand awareness and enhance our ability to penetrate additional leading customer accounts. In addition, we believe that close
relationships with OEMs and ODMs will allow us to better anticipate and address customer needs with future generations of our
products.
Sustain Technology and Product Leadership in 3D Graphics and High−Definition Video, and Media Communications and
Ultra−Low Power. We are focused on using our advanced engineering capabilities to accelerate the quality and performance of 3D
graphics and high−definition video, media communications and ultra−low power processing in PCs and handheld devices. A
fundamental aspect of our strategy is to actively recruit the best 3D graphics and high−definition video, networking and
communications engineers in the industry, and we believe that we have assembled an exceptionally experienced and talented
engineering team. Our research and development strategy is to focus on concurrently developing multiple generations of GPUs, MCPs
and WMPs using independent design teams. As we have in the past, we intend to use this strategy to achieve new levels of graphics,
networking and communications features and performance and ultra−low power designs, enabling our customers to achieve
award−winning performance in their products.
Increase Market Share. We believe that substantial market share will be important to achieving success. We intend to achieve a
leading share of the market by devoting substantial resources to building award−winning families of products for a wide range of
applications.
Use Our Expertise in Digital Multimedia. We believe the synergy created by the combination of 3D graphics and high−definition
video and the Internet will fundamentally change the way people work, learn, communicate and play. We believe that our expertise in
high−definition graphics and system architecture positions us to help drive this transformation. We are using our expertise in the
processing and transmission of high−bandwidth digital media to develop products designed to address the requirements of
high−bandwidth concurrent multimedia.
Sales and Marketing
Our worldwide sales and marketing strategy is a key part of our objective to become the leading supplier of performance GPUs, MCPs
and WMPs for PCs, handheld devices and consumer electronics platforms. Our sales and marketing teams work closely with each
industry's respective OEMs, ODMs, system integrators, motherboard manufacturers, add−in board manufacturers and industry
trendsetters, collectively our Channel, to define product features, performance, price and timing of new products. Members of our
sales team have a high level of technical expertise and product and industry knowledge to support a competitive and complex design
win process. We also employ a highly skilled team of application engineers to assist the Channel in designing, testing and qualifying
system designs that incorporate our products. We believe that the depth and quality of our design support are key to improving the
Channel's time−to−market, maintaining a high level of customer satisfaction within the Channel and fostering relationships that
encourage customers to use the next generation of our products.
In the GPU and MCP segments we serve, the sales process involves achieving key design wins with leading OEMs and major system
integrators and supporting the product design into high volume production with key ODMs, motherboard manufacturers and add−in
board manufacturers. These design wins in turn influence the retail and system integrator channel that is serviced by add−in board and
motherboard manufacturers. Our distribution strategy is to work with a number of leading independent contract equipment
manufacturers, or CEMs, ODMs, motherboard manufacturers, add−in board manufacturers and distributors each of which has
relationships with a broad range of major OEMs and/or strong brand name recognition in the retail channel. In the WMP segments we
serve, the sales process primarily involves achieving key design wins directly with the leading handheld OEMs and supporting the
product design into high−volume production. Currently, we sell a significant majority of our digital media processors directly to
distributors, CEMs, ODMs, motherboard manufacturers and add−in board manufacturers, which then sell boards and systems with our
products to leading OEMs, retail outlets and to a large number of system integrators. Although a small number of our customers
represent the majority of our revenue, their end customers include a large number of OEMs and system integrators throughout the
world.
5