ATI To License Chips

Looks like ATI is taking drastic measures to compete with NVidia as they are licensing their chips to third party card makers according to The Register (thanks the archvile). ATI will continue to sell cards under their own brand, and the other manufacturers are only allowed to sell their cards to system integrators and reseller channels, with ATI selling their cards in the retail section and to OEMs like Apple.

Success depends on minimising competition between ATI and its third-party board makers. Segmenting the market the way ATI has will help, but what's to stop major OEMs buying the cheapest possible boards from the third-parties and cutting ATI out of the loop? ATI will still make money on the deal, through the chips the board makers will buy, but not as much as it would dealing with the OEM directly. With sufficient numbers of board makers, ATI will make up the loss, and presumably it's confident it can do so.