Nvidia Looks to Undercut Mobile Phone Market

By | Feb 17, 2012

Graphics-card maker Nvidia has seen success in the tablet market with its line of Tegra 2 dual-core processors, quoting over $360 million in sales for Q4 of 2011. Now, the company hopes to make both the Tegra 2 and new quad-core Tegra 3 processors a significant force in the smartphone market as well, adding to its estimated $4 billion total revenue. Planned as a part of both Windows 8 devices and many of those running Android 4.0 Ice Cream Sandwich (ICS), the new phones have the potential to offer midsized IT departments real business computing power instead of a watered-down consumer alternative.

Price Isn't Everything...

But it counts. CNET's article detailing the new market eyed by Nvidia speaks to the company's committment in shipping phones that drastically undercut the prices of consumer offerings, such as the iPhone. The company is calling its new device segment the "1000 RMB phone." RMB refers in this case to Chinese currency. Since the iPhone retails for almost 5000 RMB in China, the price point for Nvidia's offering translates to almost an 75% price advantage over the market's biggest competition.

So far, it's been confirmed that the phone will use the Tegra 2, dual-core processor along with a 3G modem, but CEO Hsun Huang knows that the company's biggest competition comes from rival Qualcomm, which already ships an application processor that has an LTE 4G modem. Nvidia says they will release a similar Tegra/LTE configuration later in 2012.

Breaking Into the Market

Tegra 3 processor production has ramped up for the company, and Nvidia estimates 50% growth in that sector of their business, quarter to quarter. The Asus Transformer Prime Tablet already runs on the Tegra 3, more tablets with the processor under its hood are in the works and Huang has dropped hints that HTC will release a quad-core mobile phone.

While part of the Nvidia phone's appeal is the lower price, according to Canadian mobile technology site mobilesyrup, the integration of both 3G and 4G chips into Nvidia's existing lineup will also cut down power consumption, something current mobile phones--like the iPhone 4--struggle with. However, the company isn't having as much luck with their new 28-nanometer chip production, which will drive many of the new processors; they cite a "28 nanometer yield shortage." Qualcomm has already confirmed they have such a chip.

As a graphics chipset powerhouse, Nvidia has earned a reputation in the industry for producing high-quality, high-speed products. The evolution to a mobile phone and tablet core creator only makes sense, and if they can continue deliver this same quality with longer battery life and a lowered price, they may be able to capture the interest of IT pros and consumers alike.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.

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