ATI graphics product group of Advanced Micro Devices, said this week that it had slashed the manufacturer suggested retail price (MSRP) of its flagship graphics board and that certain partners may be even offering their versions of the product at even lower pricing, significantly boosting appeal of the card on the market.

From now on, ATI Radeon HD 4870 X2 2GB graphics cards cost $449, down $100 from the previous price of $549, which has been effective for about five months. Moreover, some partners of ATI are offering $50 mail-in rebate on Newegg.com online for their Radeon HD 4870 X2 models, which effectively makes such graphics boards available for $399.

The price drop on the Radeon HD 4870 X2 graphics card comes as Nvidia Corp., the arch-rival of ATI/AMD, is gearing up to release its dual-chip graphics card named GeForce GTX 295 that is supposed to outperform the model 4870 X2.

ATI is working hard to capture 50% of the market of standalone desktop graphics adapters. One of the ways to gain market share is to slash prices of final products. In Q3 2008 Nvidia Corp. commanded 60% of shipments with its GeForce chips, whereas ATI Radeon’s share was about 40%, according to market tracker Jon Peddie Research.

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