Nvidia's Tegra mobile business to stay flat this year

Nvidia said its mobile business will remain flat this year, partially due to a slight delay in the release of its LTE-capable Tegra 4 chip.

Separately, Nvidia said it will return $1 billion this fiscal year to shareholders in the form of stock buybacks and dividend payments, including $100 million in stock repurchases this quarter.

The company's announcements are notable considering the steep declines in the PC market, where Nvidia made its name selling graphics cards to desktop computer makers. Research firm IDC said earlier this week that worldwide PC shipments in the first quarter were the worst the firm had seen since it started tracking the space in 1994. IDC said PC shipments totaled 76.3 million units in the first quarter of 2013, down 13.9 percent year-over-year.

Nvidia said that it is focusing on smartphones, tablets and other devices to counteract the declines in the PC market. However, the company's shift hasn't been entirely smooth. During an investor conference this week, Nvidia CEO Jen-Hsun Huang said the company's Tegra business, which focuses on smartphones and tablets, has been growing "very quickly"--but he said the operation will be "about flat" this year, according to Cnet.


According to Nvidia, citing Gartner and Strategy Analytics, the traditional computing market, which was dominated by Windows, continues to be changed by Apple and Android.

Huang said Nvidia pushed back the launch of its Tegra 4 chip by one quarter to add LTE to the product. Nvidia launched its Tegra 4 chip in January and introduced its Tegra 4i product, which includes LTE, a month later.

"It was important for us to engage that marketplace as quickly as possible. ... We decided we'd sacrifice the schedule of Tegra 4 by a quarter so we could pull in Tegra 4i by more than two. ... That was a good decision," Huang said, according to Cnet. Nvidia said it expects mainstream smartphones to be running its Tegra 4i product by the first quarter of next year.

Nvidia acquired cellular modem maker Icera in 2011 and has been working to integrate LTE into its Tegra application processors.

Although Nvidia has warned of sluggish Tegra sales this year, the company remains committed to the space. According to VentureBeat, Huang said the company faces "once in a lifetime opportunities" in mobile computing, and that "some day, every single processor we make will be a Tegra. But this is not about us growing into mobile devices only. This is about inventing the future of computing."

Overall, Nvidia said it expects revenues in fiscal year 2013 of $4.3 billion, up from $4 billion in the previous year. In Tegra, Nvidia expects fiscal year 2013 revenues of $540 million, up 50 percent from the $360 million the company recorded in the previous year.

Although Nvidia has notched relatively solid progress in smartphones and tablets so far, the company has a long way to go to catch up in the cellular baseband market. According to Strategy Analytics' latest report on the market, Qualcomm, MediaTek, Intel, Broadcom and ST-Ericsson grabbed the top five spots in the market in terms of revenue share, in that order. The research firm said Qualcomm led the cellular baseband market with 52 percent revenue share in 2012, followed by MediaTek with 12.5 percent and Intel with 12.3 percent.

For more:
- see this VentureBeat article
- see this Bloomberg article
- see this Cnet article
- see this Nvidia release
- see this Nvidia presentation (PDF)

Related Articles:
Rumor mill: Google's next Nexus 7 arriving in July with LTE
Qualcomm pushes chip it says will solve LTE fragmentation
Nvidia unveils first integrated Tegra/LTE processor, the 4i
Nvidia CEO: We'll tackle smartphones after we combine processors with LTE modems

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