Nvidia Aims for Growth Amid Slowdown

"We lost some market share recently because of our transition, and because our competitor surprised us with a significantly lower cost," Huang said. "We were caught off guard and we shouldn't have been. But we're not caught off guard now, and it time for us to go get our share back."

In the third quarter, Nvidia's desktop graphics processor shipments declined 12% sequentially, which is something of an improvement from the 40% drop it suffered in the second quarter.

Of course, Nvidia's efforts to reclaim market share are taking place against a backdrop of a slowing economy that could cause consumers to stop buying PCs, and expensive add-on processors, from any company.

At a technology conference in San Francisco earlier Thursday, Intel(INTC Quote)CEO Paul Otellini described the economic recession as the deepest he'd seen in his lifetime. Intel, along with just about every chip firm, has issued a financial forecast for the fourth quarter well below typical levels.

Nvidia finance chief Marvin Burkett said it would be unrealistic to expect any sort of robust Christmas spending by consumers this year.

He said that Nvidia expects revenue to be down sequentially in the fourth quarter, with the midpoint of the expected range to be down 5%, which translates to $852.8 million.

That's lower than the average analyst expectation of $909.9 million, although investors have generally considered Wall Street estimates to be artificially high for the fourth quarter.

Burkett said Nvidia's gross margin would be relatively flat, as would its operating expenses in the current quarter.