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Monday, 12 May 2014 10:40

Nvidia changes Tegra strategy

Written by Fuad Abazovic



Not much of a chance in phones

We spent a few weeks trying to find out what Nvidia has in mind for Tegra, as the company made quite a few sharp turns in its strategy. The first thing that happened is CUDA support, which is good for the security and defence markets, as it enables target recognition and similar tasks that can also be used for some peaceful technologies such as self-driving car.

Jetson is a cheap supercomputer base, but it is a very expensive microcontroller board. Apparently it is selling well, as it’s the fastest sub-10W supercomputer capable chip one can buy, and it costs $192. What Jen-Hsun Huang mentioned in the company's financial Q1 2015 conference call is that Nvidia envisions "three growth drivers" for Tegra. They see Tegra in mobile devices, automotive and gaming.

Automotive is growing for Nvidia, but the company doesn’t really tell the world any meaningful numbers. Winning Tesla’s business means a few hundred thousand chips considering the fact that Tesla uses more than one Tegra chip per car. Tesla uses the old Tegra 2, something that the mobile devices market vaguely remembers. A total of 87 million cars were sold worldwide last year and there is a nice market opportunity for Nvidia there. Of course, the competition won’t stand still and let Nvidia conquer the automotive market unopposed, but we don’t see car manufactures changing Tegra for Qualcomm as quickly as this happened in mobile devices. Cars as platforms are built to last at least 5 years before any significant refresh and once you get a deal, you stay with the company for a while.

The other two catalysts that Huang mentioned, including mobile devices, might be a more troublesome component of Nvidia’s strategy. We simply cannot see Tegra K1 in any significant high-volume phone design in 2014. There are still some chances that Tegra K1 might end up in a few cool tablets, but it will be tough to land some top selling ones including the Nexus or Kindle Fire tablet refresh. In 2013 Qualcomm Snapdragon won both of these top selling tablets that are selling well. Gaming as a catalyst for Nvidia’s Tegra mobile strategy is a good playing card, but we are not sure how many Shield consoles you can sell. Nvidia has its own tablet, the Tegra Note 7, and probably a Tegra Note 8 in the works. However, these won't outsell Google Nexus tablets anytime soon. Intel has big tablet plans to boost its market presence with 40 million units planned this year and Intel’s market development fund boosters are legendary and traditionally they work quite well with Taiwan, China, even US- and EU-based companies. Qualcomm and Mediatek have a strong presence in the tablet market, with Mediatek getting stronger every quarter especially in the lower end of the market. AMD wants a piece of Intel’s x86 tablet pie, too. It will be an interesting market to watch.

Since Tegra K1 doesn’t have an on board LTE it is a hard sell for phones in 2014. Top four phones in 2014 don't have it as Samsung Galaxy 5, HTC One M8, LG G3 chose Qualcomm and Apple is using its own chips. Other top brands including Sony, Motorola are using Qualcomm for their high end phones. Even Chinese Xiaomi chose Snapdragon for its Mi3 phone, but there is a slim chance that there will be Tegra version too. China doesn’t really care about LTE, at least not yet. Nvidia might have a chance in the mainstream phone market, but its chances are not good. Mediatek is getting really strong in this market and Qualcomm has some great solution for this market as well. The Tegra 4i Gray chip has three design wins so far, Wiko Wax, LG G2 Mini in South America and security focused Blackphone. That’s simply not enough, not even close. At this point it seems increasingly likely that the Tegra 4i will not even have a successor.

Nvidia hopes that having two chips, one 32-bit based on Cortex A15 cores and one based on Denver 64-bit cores, might work. We will have to wait and see as the Tegra K1 has currently shipped only in the Jetson TK1 kit and the reason behind is probably the super high margin Nvidia can make with a $192 supercomputer board. We expect to see Tegra TK1 based products in June time, around Google IO. An 8-inch Tegra TK1 tablet would not surprise us, either. However, it’s not easy to be optimistic, as we simply don’t see a lot of potential design wins this year.

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