Next-gen Nexus 7 could see Nvidia ousted in favor of Qualcomm

Being pushed out of the next-generation Nexus 7 could result in a revenue dent for Nvidia in the region of $200-250 million, according to one analyst.

(Credit: Qualcomm)

The next-generation Nexus 7 tablet could see Nvidia's Tegra 4 System-on-a-Chip (SoC) ousted in favor of Qualcomm's Snapdragon S4 Pro silicon.

According to Pacific Crest analyst Michael McConnell, Google is choosing to go with the Snapdragon S4 Pro APQ8064 chip over the Tegra 4 hardware, not only because Qualcomm is willing to offer a better deal but also due to the S4 Pro's tighter integration with 3G and 4G modem technology.

This simplifies the supply chain, which means ultimately means lower costs.

The S4 Pro is a good choice for the Nexus 4 because it offers integrated cellular technology; something that even the upcoming Tegra 4 SoC—which Nvidia claims is the world's fasted mobile processor —will not.

The Tegra 4, previously codenamed "Wayne", was unveiled at CES 2013 and features at its heart 72 custom Nvidia GeForce GPU cores, giving it six-times the graphics processing power of the current Tegra 3. The Tegra 4 also comes with worldwide support for 4G LTE voice and data by utilizing the optional fifth-generation Nvidia Icera i500 chipset .

The loss of a place in the Nexus 7 represents a big hit for Nvidia. At an average price of $20 to $25 per Tegra processor McConnell estimates that it will mean an "adverse revenue impact of $200 million to $250 million."

McConnell claims that the new Nexus 7 is scheduled to begin shipment in the second quarter of 2013. 

But it's not all bad news for Nvidia.

McConnell sees good news for the company on the workstation front, with a rise in high profit margin—around 46 percent—of professional Quadro GPU sales. McConnell has increased his Quadro workstation sales estimate to $897 million, representing an 8 percent year-over-year growth, compared to his previous estimate of $857 million, or a 3 percent year-on-year growth. 

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