Nvidia hit a milestone with the launch of Microsoft’s Kin phones—it was the first time the graphic chip maker’s Tegra processor was used in a smartphone. Now Nvidia CEO Jen-Hsun Huang is plotting his second generation Tegra and the master plan revolves around Android.
Huang made the comments about Tegra following Nvidia’s first quarter earnings. Nvidia is trying to crowbar its way into the smartphone space, but faces tough competition from Qualcomm, Texas Instruments and others. The task: Nvidia has to lead on smartphone performance—especially graphics and items that make the user interface pop.
Here’s Huang talking Tegra:
We’re pretty excited about Tegra, as you can imagine. Our first generation strategy we wanted to focus on one operating system. It was our new player in this marketplace. And we focused all of our energy around the Microsoft Zune and Microsoft WinMobile. And I’m delighted with what we’re able to build.
It demonstrates that NVIDIA has created an architecture that’s extremely low power while being very high-performance, and that we know how to build phone processors. It’s a big deal. It took us a long time to figure it out. And it’s been a long-term investment. And so that the Microsoft Kin (right)and the Zune HD are the results of that first generation.
On the second generation, we were able to expand to focus a lot of our energy around Android. And although it made sense for the first generation Androids to use available phone processors — the follow-on generations of Android are really going to go after performance. And iPhones are out there; the iPhone 4G is coming. The iPad is obviously a revolutionary product.
The bar is pretty high for all of the mobile players. So they need a processor that can keep up with the A4. If not, be much better than what the A4 can do, because they have to take on the leader in this space. So I think the second-generation Tegra is going to do incredibly well because Android is doing incredibly well. So we’re going to come to market with the second-generation Tegra with the third-generation Android. And so that’s our focus now, which is the — and I think it comes together at the end of the year. We’ve talked about smartphones; we’ve talked about tablets. We have a very large number of designs in pipe in flight, and so we’re looking forward to starting in third quarter or fourth quarter, many design wins to show up in production.
A few key takeaways from that passage:
- Apple’s A4 chip is setting the standard;
- Android can make the Tegra successful if the stars line up;
- Multimedia gives the Tegra a fighting chance against incumbents.
Huang added that resolution with next generation smartphones and tablets may be the differentiator for Tegra.
With iPad and next-generation smartphones, resolution is a huge issue. And you need to have very snappy graphics with a 10 by 7 display, if not even bigger than that, even higher resolution than that. You’re just not going to do that with a application processor that’s not designed for that. And so that’s our contribution and that our differentiation, and that’s what people are seeing out in the market.
Other odds and ends:
Nvidia’s first quarter earnings of 23 cents a share on revenue of $1 billion topped Wall Street estimates. However, Nvidia said its second quarter revenue would be $950 million to $970 million compared to Wall Street estimate of $990 million. Meanwhile, Nvidia’s inventory levels were higher than expected.
Nvidia CFO David White had some interesting comments about consumers in China. He said that the Chinese notebook market is the fastest growing notebook market and discreet graphic chips are a big factor in purchases. White said:
The Chinese market is much more sensitive to reviews of products. And they’re much more — the consumers are — scrutinize their purchasing decisions much more than elsewhere around the world. And they tend to be much more value-conscious. I mean, they will go out and buy what is the best performance per dollar versus what brand OEMs that it comes from.
