AMD has spent a lot of money developing GCN and it shows with products that provide better performance than the previous generation and do so with less power consumption, a hard trick to pull off.  There are also numerous other architectural changes in the three current families of Southern Island cards which benefit users, but most will be focused on faster graphics without the need to upgrade their PSU.  Until last week, since AMD had the fastest GPU going period, as well as much better price/performance numbers than NVIDIA’s choice, there was no reason for AMD to consider changing their pricing structure as they need to recuperate the amount of dollars spent on R&D as well as manufacturing.

Last week the GTX 680 changed that, as not only did NVIDIA steal the performance crown back from AMD but they also successfully reduced the power consumption which was the Achilles Heel of Fermi.  Even worse news for AMD was the pricing that NVIDIA attached to their flagship Kepler product, at $500 they are priced below AMD’s HD 7970 by between $50 to $100.  AMD’s only hope is that the process problems at TSMC will keep the availability of the GTX 680 down, which it seems to have as NewEgg has run out of that card.  Hoping that your competitor cannot keep their stock up is not exactly a good model to run your business.

Unfortunately any price change AMD makes will have repercussions on many models.  The 7950 averages about $460 which is far too close to the GTX 680’s price since the performance is not that close, however dropping the HD 7950 towards $400 makes the HD 7870 at $360 a little uncomfortable.  That is going to have an effect on AMD’s profitability, since they likely set out their accounting based on the current pricing of the Radeon series and will have to recalculate a lot of numbers to lower price and still remain profitable.  However painful a process that might be they need to think of it sooner, rather than later; NVIDIA has more Kelper cards in store and they are not going to cost more than the GTX 680.

So far we have not heard any substantiated rumours about price changes from AMD but you can speculate that they must be coming.  For now you should first decide how much your budget can manage and then start looking for specials at retailers that bring the cards down to the price you have decided you can afford.  If they aren’t low enough today then wait a few days as the GPU market is going to be decidedly unstable for the next while. 

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