Nvidia's Tegra weak spot: An assumption Android tablets take off

Nvidia's Tegra weak spot: An assumption Android tablets take off

Summary: Nvidia is upbeat about the prospects for its Tegra mobile chip, but analysts remain wary.

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Nvidia is having a great day. CEO Jen-Hsun Huang is upbeat, Nvidia's outlook for fiscal 2013 looks swell and the company's Tegra chip could be a juggernaut.

So what's the problem? Tegra's potential largely rests with the ability of Android tablets to take off before Qualcomm and Texas Instruments become more competitive in 2012.

If Android tablets---Samsung's Galaxy Tab, Motorola Xoom etc.---garner volume shipments Nvidia can become entrenched. Toss in Windows 8 tablets on deck with Nvidia's Kal-El chip and there's good reason for Huang's optimism.

How optimistic is Huang? Get a load of a few recent quotes.

Huang told CNET News' Roger Cheng that Nvidia's mobile chip business will have revenue of $20 billion by 2015. In fiscal 2013, Nvidia will deliver sales of about $5 billion. Huang added:

We'll be quite a force to contend with...We're the only person actively on the dance floor with Qualcomm.

Speaking at a Citi investment conference, Huang said Android tablets are doing great.

The tablets are doing great, frankly, sold out in a lot of different countries. Galaxy Tab is the one I use. I love it. If you haven't had a chance to try it, you really should. Honeycomb [3.2 has] a huge improvement and this is lighter, thinner, higher resolution, and more powerful than an iPad. This one is more affordable and they've discovered a wonderful business model.

The game for Nvidia is to ride along with the Android tablet army as well as "superphones." Obviously, Nvidia is confident. The company projected revenue between $4.7 billion and $5 billion for fiscal 2013, which starts Jan. 30. Wall Street was looking for $4.45 billion.

But few analysts are going along with Huang's optimism even though investors pushed Nvidia shares up almost 10 percent. Evercore analyst Patrick Wang said in a research note:

Management factors in $1 billion (in sales) from Tegra versus an estimated $425million this year. NVIDIA continues racking up design wins with 53 smartphones and with 13 tablets; however, many have failed to impress, never reaching volumes. Further, the competitive landscape will intensify in 2012 with refreshed offerings in Qualcomm’s Krait and Texas Instruments' OMAP4/5.

Other analysts are also skeptical about Nvidia's Tegra optimism. Macquarie analyst Shawn Webster said:

Given the macro uncertainty and also a Tegra ramp which has been disappointing in recent quarters, we are not changing our estimates.

Deutsche Bank analyst Ross Seymore said that Nvidia's outlook looks aggressive. Barclays analyst C.J. Muse noted that Nvidia is assuming Tegra will have 70 percent of the non-iPad tablet market. "We are a bit surprised Nvidia is so confident today on its outlook 15 months from now," said Muse.

In other words, Huang buys his Tegra and tablet thesis, but many folks remain skeptical.

Topics: Tablets, Android, Hardware, Laptops, Mobility

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29 comments
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  • I think you made the wrong association

    I don't think nVidia are expecting Android tablets take off - they're waiting for Win8 tablets and hybrid laptop/tablet devices to hit the market and take off.
    bitcrazed
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @bitcrazed
      WIN 8 = WP7 LOL Your giant tiles will never take off!
      Hasam1991
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Hasam1991

        Wow you apparently have no idea about Windows 8 nor have any experience using it.

        I've been using it and the full OS is still there and it is the users choice if they want to use tiles or the pseudo tile interface or just go with the beautiful OS.

        Before assuming and looking like a fool, try looking into it before hand. ;) kthnxbai
        audidiablo
      • NVidia's chief **lies** about SGT being 'more powerful than iPad', since it

        @Hasam1991: ... SGT has <b>ancient Tegra-2</b> design with no dedicated vector FP operations unit and has three to five times slower graphics than Apple's A5 SoC in iPad 2.
        DDERSSS
  • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

    It's like a broken record. Everyone said the exact same crap about Android phones. Now take a look around?
    Droid101
    • What, only 2 companies make a bit of money off of Android?

      @Droid101

      HTC and Samsung. The rest (Moto, LG, SE,...) are lossing money.

      nVidia's problem is they over promis (on performance, battery and schedule) and under-deliver. We saw it on the Tegra, Tegar II and now the Tegra III (already 3 months late shipping production silicon).
      Bruizer
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Bruizer Tegra delivered but you seem to be one of the few still in denial.

        When 3.2 rolled out my XOOM got over 10 hours of battery life (closer to 12 actually) and performance within 10% of the iPad 2 based on benchmarks... This works because the resolution is higher and 3.2 has more features and thus more to move than iOS 4.
        slickjim
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @Droid101
      Sigh cell market and tablet market are not the same. Your right it does sound like a broken. It gets old hearing the same people try to compare cell phones to tablets. It is also old hearing how android tablets are going to overtake apples ipad any day now.
      illwill112
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @Droid101 This is the RDF, it has been in full effect at ZDNet for a few years now.

      This is the point where they are trying to stop the momentum from building so they tell have truths and lies... Of.course the Apple Fanboys are all too willing to jump on.board and.spread some.unsubstantiated lies of their own (Bruizer will be one of the biggest).
      slickjim
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @Droid101 <br><br>As have been said countless times, this ain't phones. Getting a free phone that is subsidized and with a two year contract and getting someone to shell out hundreds of dollars for a tablet are two different beasts. In addition, Android isn't making anyone any real money. Apple is taking 66% of the profits up from 50%. And really, have you been following this Oracle/Google lawsuit? Yikes. It'll get worse.<br><br>In the US, for instance, Android doesn't have Verizon's dollars pushing it and without carrier subsidies, non-iPad tablets are proving dead in the water. How many companies can withstand the $100+ million dollar losses of HP?
      dhmccoy
  • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

    The naked truth is that if Win8 deliver what it promises, the death of Android tablets are guarenteed. Win8 tablets will be in the same price range as Android and its likely that 90% of informed users will pick a Win8 tablet. The outcome will be pretty obvious by end 2012.
    owlnet
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      To the extent that what Win 8 "promises" is tablets that run all the things that people call "windows applications," it is going to be one of the biggest belly-flops of all time. The only reason to want Windows is the applications. Not some small number of the applications that Microsoft re-compiles for ARM, but large numbers of them. How is that going to happen? How long will it take?<br><br>The Win 8 hype is just that: hype, delivered in the hope that most people will skip over the part about the Tegra chips not running x86 code.
      Robert Hahn
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Robert Hahn <i>"How long will that take"</i><br><br>It's anyone's guess at this point, but the fact of the matter is that if you have the source for a native app, and that source is well written (i.e. it doesn't include any non-isolated inline assembly and/or architecture specific code) then re-compiling it for ARM should be pretty trivial.<br><br>Better still, if you have any managed apps (i.e. written in C#/VB.NET/etc), then your app should run on an ARM machine without any changs whatsoever.<br><br>There are several "should" statements in there that we'll need to wait for BUILD next week for clarification of, but there's little reason why porting existing apps to ARM shouldn't be pretty easy.
        bitcrazed
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Robert Hahn
        The Win8 app environment is all managed code. Anything written for x86 will run just fine on ARM...or any other architecture, for that matter, as long as it runs Windows.

        Windows 8 is a guaranteed success,* so there will be lots and lots of apps written for it, guaranteed.

        That does *not* guarantee the death of Android, though.

        *The "flop" that was Vista sold more than 400 million units...so yeah, it's a guarantee.
        x I'm tc
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @jdakula
        <ul><i>The Win8 app environment is all managed code.</i></ul><p>You're making my point for me. The universe of Windows apps is absolutely <i>not</i> all managed code. There will be things that people expect to see running on a tablet that calls itself "Windows" that in fact will not run.<p>
        Then there's the interface issue. Virtually no legacy Windows app is expecting to have to interact with, or take commands from, a touch screen. Yes, I know there are kluges that emulate a mouse, etc., but they suck.<p>
        Windows 8 on tablets should rise or fall on its merits, and on the apps that are written for tablets running Windows 8. There will be plenty of those. Acting as though Microsoft will once again enter a market late and crush all competition with the mountain of legacy Windows apps is dishonest. As we're seeing in the phone business, it's not going to be that easy.
        Robert Hahn
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Robert Hahn

        There is no re-compiling. Everything is compatible.

        There are many reasons to want windows, one is that it does everything and runs everything, wait that means it can do everything like a real PC unlike the watered down alternatives that are ultra buggy... And then there is also the iPad.

        Tegra chips will run whatever is needed. It is ARM which Windows 8 fully supports and will run all Windows applications. It's like saying x64 cannot run any x86 application. Fat chance dumbo.

        If anyone is belly floppin that would be you son.
        audidiablo
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @owlnet
      Yea just like WP7 is taking over Android... right...
      Hasam1991
      • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

        @Hasam1991
        All things take time... Just like Android stormed out of the gate and overtook iPhone in its first year?

        Things take time... Mango is almost here just wait ;) if anything you seem more hopeful than confident. The more my friends get owned by my phone the more they regret their Android purchase. Getting stuck on a contract sucks but it only takes time and they will ditch Hemroid and get an iPhone or a WP7... Most people leaning towards WP7 as it is new as iPhone is getting kind of stale and Android is full of bugs, glitches, viruses, lack of privacy, fragmentation and so on... People are learning and moving when possible.

        Like I said all things take time. People will figure out what they really paid for in the end and move away ;)

        Same goes with OS X and Windows... They buy a Mac and figure out... Oh I can't do like 90% of the things I could on a PC unless I pay several hundred more dollars?... Next time I'm going back to Windows or buying Windows for my Mac. Notice marketshare ;)
        audidiablo
  • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

    Larry, you need to get out more! Go to the Best Buys and watch, people really are looking at the Android Tablets... A guy I know at work is looking at the Iconia A100 and he isn't technical at all!

    The reality is, nVidia is in a good spot because they have an in with Google and they now have 2 tablets that can be had for under $300 with one being 10" and the other being 7".
    slickjim
    • RE: Nvidia's Tegra weak spot: An assumption Android tablets take off

      @Peter Perry
      OK Apple sold 8,000,000+ iPads in the last quarter alone!! Head to an Apple store and see how many people there are playing with iPads
      Hasam1991