
By Charlie Demerjian
31 July 2008, 7:46 PM
WE KNOW THAT HP, Dell and every other PC maker out there is having graphics chips fail at alarming rates due to defective Nvidia chips, but who pays in the end? The users in everything other than money, but the cash cost is evenly divided between HP and Nvidia.
According to people close to the agreement, Nvidia has agreed to shoulder half the costs that HP sees, and that is averaging about $150 per incident. Someone doesn't want this information out, and anyone close to it is being shut up. This brings up two questions, why are people not talking when it is in their best interest to talk, and how much could this cost in the end? Both have unpleasant answers.
The talking part is the most puzzling, if you look at HP and Dell, they are getting their posteriors reamed by their best customers. We will tip the hat to Dell for leaving the comments up there, they are taking quite a severe beating. HP is taking one as well, just not as publicly, and with far less direct control, as it is off their servers. It is costing them about as much in dollars as it is reputation.
If you recall, the initial NV hit on this was $150-200 million, and the OEMs pay half of that, depending on who they are. This means they take the same hit collectively, likely mostly shouldered by the big three (Dell, HP, Lenovo), meaning tens of millions per company. So, the companies are being bled to the tune of eight digits and getting kicked in the sensitive parts as a thank-you.