Nvidia blames Windows RT for poor Tegra revenues

Nvidia is bracing itself for a 40 percent fall in Tegra revenue, and the company is pointing the finger of blame at Microsoft's Windows RT.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

The fallout resulting from the failure of the Windows RT platform extends far beyond Redmond, and is casting a shadow over chip maker Nvidia.

See also: Nvidia CEO reveals Microsoft Surface 2 plans, includes 'the killer app'

Nvidia is bracing itself for revenues from its Tegra chips to fall by as much as 40 percent this year, and it is putting the blame for this – in a passive aggressive way – at Microsoft's door.

"The decline comes from, so coming into the year we had pretty high expectations on one particular platform and there’s no sense mainly, but it's a very important platform that also derived from it a lot of design wins," said CEO Jen-Hsun Huang said on a Thursday conference call discussing Nvidia's second-quarter financial earnings.

(Source: Microsoft)

That "very important platform" has to be Microsoft Windows RT-powered tablets. At the core of this hardware was Nvidia Tegra 3 chips, which are based on the ARM Cortex-A9 processor. Tablets falling into this category include Microsoft's Surface RT, the Asus VivoTab RT, and the now defunct Lenovo Yoga 11.

"And because this particular platform just didn't do as well as we or frankly anybody in the industry had hoped, we don't expect as much returns on that investment as we originally hoped," explains Huang.

It's likely that the usually outspoken Huang is being reserved in his criticism of Microsoft because Nvidia needs Microsoft and Windows RT to diversify its Tegra portfolio, which is otherwise very reliant on the success of Android. Windows RT gives the Tegra line credibility outside of Android.

We know that sales of Windows RT devices have been weak, and during the recent fiscal quarter Microsoft took a charge of US$900 million related to the failure of the Surface RT tablet.

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