Do you all remember in 2009 when Nvidia (NASDAQ:NVDA) did not have a chip to show that they were bragging “we’re not a hardware company, but a software company”? Well, they aren’t. They are still a hardware company and will be in the future, albeit in a different segment: Mobile.
Sticking with this strategy, Nvidia announced yesterday the acquisition of Icera and all of their IP portfolio. To Nvidia this is one step further in their quest to enter the mobile segment.
Icera is a small British company that has a unique approach to baseband processors. Instead of relying in a different hardware for each wireless standard Icera developed a chip, called DXP (Deep Execution Unit), a ultra-low power chip which supports modes from HSPA category 8 to 50 Mbps Multimode LTE according to the software loaded in the system.
With this approach you can have a single piece of hardware covering a broad spectrum of the mobile market, a boom for a low volume manufacturer such as Nvidia.
All of this means that Nvidia is, financially speaking, already abandoning their current ship. In the medium term, you all can forget about Nvidia’s graphics chips for PC use. Their money isn’t there anymore. In the medium term you can forget their GPU and HPC cards. With the current market trend they won’t have the means to develop a competitive chip in two or three generations from now. The consolidation of features and functions continues apace.
To Nvidia this seems to be a good acquisition. Nvidia already develops graphics chips, they already have an ARM based processor, and now they are adding RF chips. What they want is to sell entire mobile platforms for OEMs. A single package containing processor, graphics and RF ready to sit in a top expensive Smartphone, arm based netbook or tablet.
Will they succeed? It depends on the execution. Tegra 3 will have a time lead over its competitors and if Nvidia can deliver, something they have a reputation for not doing in this segment. If they don’t, they have a big problem. The desktop market this year is poised to make another dent on their balance sheet, and it only gets uglier from there.S|A