The past three years have been a breeze for Nvidia, but - according to Nvidia itself - it seems that the tide is turning.
In a move most analysts perceive as reflecting the strength of AMD's new Radeon 4850 and 4870 graphic cards, Nvidia announced that its Q2 revenue will be around $875 million to $950 million. This is significantly lower than previous expectations of $1.1 billion.
Nvidia is currently dominating the high end segment of the graphics cards market with its GeForce 280 GTX; but it is facing a tough competition in the market's midrange where AMD offers equally performing products at lower prices. Nvidia also faces a tough competition in the low-end laptop graphics market as Intel and AMD tend to have larger market shares.
Adding salt to the wound, Nvidia reported higher than average failures in both the laptop GPUs and in laptop chipsets; and so they allocated $200 million to cover a massive recall of those products.
Nvidia said that they used materials "that proved to be weak" in creating those chips and their packaging. Nvidia then blamed laptop manufacturers for their poor thermal designs.
Nvidia's stock price slid over 25% following the aforementioned announcements.