Like graphics chip manufacturers, add-in graphics board makers find themselves on an ever-accelerating development treadmill. A new generation of graphics technology appears every 8 to 12 months, according to Ed Buckingham, an analyst at International Data Corporation (IDC), which authored the survey.
Whatever company releases the hot chip or incorporates that chip on a supplemental, user-installed circuit board sees sales skyrocket, while firms that slightly miss a product cycle experience a slump.
"It tends to go in waves. A company that is at the top one year can be No. 2 or 3 the next," he said. "Come the holiday season of 1998, if they [ATI] mess up, somebody else will take their place."
Add-in board makers face an additional pressure in that graphics functions increasingly are migrating to the motherboard (as a computer's main circuit board is called), making add-in boards a luxury. This forces board makers to incorporate new functions such as DVD playback or better 3D processing into their products.
In similar fashion, sound cards, once a high-end feature, have become nearly standard on PCs.
Still, the push toward graphical computing will likely continue to fuel add-in board sales.
Notwithstanding the competitive market, sales continued to climb. Total add-on board sales came to 20 million units in 1997, a 54 percent increase from 1995. Sales will climb roughly 50 percent over the next five years to 29 million in 2002, IDC predicts.
Two market segments in particular could be responsible for fueling future growth. One segment is the so-called PC-to-workstation market. Diamond, among others, sells high-powered add-in boards that can provide an ordinary PC with approximately the level of pixel manipulation that comes standard in workstations.
While these boards costs approximately $2,000, the cost of the board combined with a $2,000 to $3,000 PC will remain a better bargain than a performance workstation, which starts around $8,000.
At the low end, the sub-$1,000 computer revolution could also provide an impetus for add-in sales. Most inexpensive computers are currently restricted to basic 2D performance. With games and Web content increasingly adopting 3D technology, cheap computer owners may decide to spring for boards costing $100 or less.