Gigabyte's motherboard division is seeing a curious drop in shipments, but the company isn't fretting, especially as it pertains to the gaming market. For Gigabyte, the Aorus brand it created is the key tapping into the growing gaming sector even if the rest of the PC market sees a decline.
Let's back up a moment. There was a report by Digitimes noting that Gigabyte expects to see its motherboard shipments drop below 13 million units this year, down from 16-17 million in 2016. Digitimes speculated that Gigabyte might struggle to hit even 10 million motherboard shipments in 2018, in large part because of declining desktop PC sales and a supposedly dwindling DIY sector, especially in China.
Digitimes went on to note that Asus has been able to offset a sales shrinkage by promoting ROG-branded gaming products, and that MSI managed to build a firm presence in the medium to high-end gaming markets. Meanwhile, sources tell Digitimes that Gigabyte's Aorus brand hasn't kept up with the competition.
"Industry observers said Gigabyte has failed to demonstrate outstanding operating strength and market competitiveness over the years, showing high reliance on motherboards to support its revenues and profitability," Digitimes says.
Gigabyte's slump could be bad news for PC gamers because that would mean one less competitor. Gigabyte ultimately might decide to pivot if things get really bad. The motherboard market has already consolidated over the past decade, with companies such as DFI dropping out of the running.
It's a little too early to make that kind of assumption, though. The Aorus brand is fairly new, and more recently Gigabyte has been promoting its under its own label rather than as a completely separate entity. We also reached out to Gigabyte to see what it had to say on the matter.
"The PC market is slowing down but the gaming industry is continuing to grow. Aorus is our focused mission to answer that growth and provide a unified solution that performs well with the gamer in mind. This is the first year Aorus is branded in each of our product lines so we are keeping a close eye on the data and its reception," Gigabyte told us.
Gigabyate also said it is increasing its efforts with additional investment in R&D and is confident where things are headed. In other words, it's not standing pat for formulating an exit strategy.
There is reason Gigabyte (and others) should remain optimistic. Jon Peddie Research noted earlier this year that PC gaming hardware revenue reached a record $30 billion in 2016. That was before AMD got back in the game with Ryzen, Threadripper, and Vega. All three have given hardware makers an opportunity to push out new products, as has Intel's Core X series lineup.