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 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.