The desktop computer is in decline, hurt by netbooks and a grim economy. But as demand for desktops and even notebooks falls, so do Nvidia's revenues. To keep growing sales, Nvidia is counting on scientific computing, mobility, and visual computing. It's proven it can grow sales on the scientific side (revenue for that division grew by 31% from the third quarter of fiscal 2009 to third-quarter fiscal 2008—even as sales for desktops and notebooks fell by 33%), and it won some big deals based on the increasingly visual nature of computing. But now it needs to get mobile.
With two new computing platforms launched last year, 2009 will be the year Nvidia has to prove it can be the graphics go-to company for mobile devices. This summer, Nvidia expects to start announcing design wins for its two mobile computing platforms.
Nvidia is offering two products for mobile devices. Its ION platform combines a basic GeForce 9400 GPU, which can be found in the latest MacBooks, with Intel's Atom chip, designed for netbooks. The resulting device could be a cheap netbook or a low-end PC or notebook that packs a lot of visual punch into a smaller form factor. The other platform, Tegra, is designed for high-end smartphones and mobile Internet devices. It uses an ARM-based processor core to deliver a system on a chip that will run graphics at 1080p, while using less than a watt of power.
The offerings make for compelling demonstrations, and they could help Nvidia boost sales in ultramobile computing, regardless of whether Intel or ARM dominates the market. Before it can count sales, though, Nvidia has to encourage demand from device makers, fighting off competition from other graphics-friendly mobile options.
On the notebook and netbook side, Nvidia's ION platform will go up against Intel's own integrated graphics and AMD's low-power Yukon platform. The unified graphics and computing platform offered by those two vendors will be hard for a mixed Nvidia/Intel platform to beat. Jon Peddie, a GPU analyst with Jon Peddie Research, says some OEMs may mix and match but it would likely be third- and second-tier vendors seeking to differentiate themselves.
On the mobile side, I've been blown away by Tegra's visuals and low power consumption in demos, but I've also been waiting a long time for devices built on it to hit the market. Originally, I was told those devices would be out at the end of 2008. Now I'm told it will be summer before a Tegra-based device hits the market. The delay could be the result of Nvidia slowly coming to the realization that it takes longer to get a gadget out the door in the handset market than in the PC market—but device makers could also be happy with the application processors they already have, such as Texas Instruments' OMAP processor, which has been recognized as the leading media processor by most OEMs and industry analysts. I hope it's not the latter, because Tegra is truly innovative, and it could result in a smartphone or mobile Internet device that rivals the visual experience currently offered on the iPhone.
No matter what happens this year, Nvidia has to take a chance with mobile product offerings to offset its core business declines. Now we'll see if device makers think consumers want their graphics on the go—and if Nvidia is the right company to provide that.