nVidia CEO Sees Tegra as New Growth Engine
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SANTA CLARA, Calif. There's nothing like a 60 percent collapse in sales to calm down even the most bilious of CEOs. Case in point, nVidia chief Jen-Hsun Huang, who was definitely calmer in a presentation today than he was a few years back when he promised to "open up a can of whoopass" on Intel.
That's not to say he didn't take his shots at Intel (NASDAQ: INTC), based just a mile up the road, during a financial analysts briefing here at nVidia's (NASDAQ: NVDA) headquarters. He stood his ground when questioned about issues concerning Intel and AMD (NYSE: AMD), but there was less name calling than before.
Mostly, it was a discussion of how nVidia is a company in transformation. Its dominant business, graphics processors, will be the minority of its income in just a few years while Tegra, its embedded system on a chip (SoC), will account for more than half of income.
"We've invested in this because we believe wireless devices will proliferate all over the world," Huang told the audience. "You need a computing architecture as good as in your PC but low power like your cell phone. The result is Tegra."
Long-term, he believes the company will be half Tegra and the other half its desktop and mobile processor business, GeForce, Tesla and Quadra. "The reason I think it's half Tegra is because I'm certain that's where the industry is going. These laptops we're carrying around? In 20 years, they won't even look right. Kids will talk about these refrigerators their parents carried around."
Leading that group is Michael Rayfield, a veteran of Texas Instruments who spoke after Huang. As vice president and general manager of the mobile business unit, Tegra is his to shepherd to market and to OEMs. So far, Tegra has 42 total design wins, announced at the recent Computex show, including 18 smart phones and 18 customers for mobile Internet devices (MIDs).
nVidia has an aggressive roadmap for Tegra; instead of the usual two or three years for a refresh, it plans to release new products annually. The second generation Tegra is due by next year and will feature four times the performance in the same power envelope, which is under one watt. The third generation, one year after that, will have 10 times the performance as generation one, in the same power envelope.
"There will be a shorter time span between generation two and generation one design because gen-two is compatible with gen one, that's why many customers went with it," he explained.
One analyst in attendance, JoAnne Feeney, managing director and senior research analyst with FTN Midwest Securities, said she thinks Huang is taking the smart view, but there are short-term questions. "He's correct in focusing long-term on Tegra, but it's going to take a while to get that business going for them. Short-term, they have challenges," she told InternetNews.com.
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