Nvidia CEO Jen-Hsun Huang said concerns about the first wave of Android tablets "have been largely addressed" and the next generation of Honeycomb 3.1 devices will be vastly improved.
Speaking on Nvidia's first quarter conference call, Huang spent a lot of time talking about tablets. The company reported first quarter earnings of $135.2 million, or 22 cents a share, on revenue of $962 million, down 4 percent from a year ago. Non-GAAP earnings were 27 cents a share.
Meanwhile, Nvidia projected revenue to be up 4 percent to 6 percent from the first quarter. That outlook and Nvidia's financial results were better than expected. However, analysts are concerned about Nvidia's core graphic chip business, which is under fire from AMD and Intel.
Stifel Nicolaus analyst Kevin Cassidy said server adoption of Nvidia's graphics processor units was slower than expected, but he likened the uptake to enterprise solid state storage. There are benefits to new architectures, but enterprises move cautiously.
With those concerns---as well as questions about the Icera acquisition---all eyes went to Nvidia's Tegra business, which revolves around powering smartphones and tablets.
A new wave of tablets are now ramping up and are even more affordable and available on retail channels with WiFi configurations all over the world. You're also starting to see a lot of different shade of platforms, from devices that are like the Asus transformer where it is a tablet in one configuration and has a detachable keyboard in another configuration. And so those kind of devices are getting a lot of interest and available in computer channels all over the world.
We're going to expect another wave of tablets that are coming out to the marketplace now, ones that are even thinner and even lighter than the best offerings from anyplace, any supplier in the world. And those devices are just in the process of ramping. There's the really exciting new build of Honeycomb called Honeycomb 3.1 that Google just demonstrated the other day at Google I/O. We are basically stitching that up now.
Among other key items:
- Huang said Nvidia was working with Google on Ice Cream Sandwich, the latest Android OS, but wouldn't comment on whether the timing intersected with the company’s quad-core chip dubbed Kal-El.
- On ARM in Windows, Huang said his team is working closely on the transition.
- Nvidia sees smart TVs and car designs as being a potential growth market.
- It's a "foregone conclusion" that the ARM architecture will be the most important standard for applications. Huang said:
Standardization comes from compatibility with software. And the thing to keep in mind today is that the vast majority of the software developers around the world for consumer computing are increasingly developing on ARM processors.
And, if you take a look at the number of devices that are being shipped today, there are far, far, far more ARMs computers being shipped than there are x86 computers being shipped. And if that attracts more software developers, then there's more rich software being developed for ARM that over time you would think that ARM becomes the most valuable platform for enjoying software.
And so that's how standardization happens and you know how fast mobile computing and the Internet and these application stores is causing new platforms to make a difference. It was only a few years ago that these ARM-based either iPhones or Android phones came to the marketplace, and just look at how many applications have been downloading, how many gigabytes have been downloaded of applications.