As Nvidia’s most recent earnings report shows, Tegra is in a much different place than it was a quarter or a year ago. Nvidia’s SoC that, despite the company’s best efforts, never got the hardware wins expected was actually the success story of this quarter’s earnings report.
Nvidia has had a tough time convincing manufacturers to put its chips in devices. Granted, it’s not like Tegra is without hardware wins. Xiaomi, the four-year old mobile vendor that has taken China by storm, ships its MiPad with a Tegra K1 SoC. This is the device that sold out its first batch of 50,000 in just four minutes. Without a doubt, it’s an important hardware win for the company.
But it’s just one device. While Qualcomm can count dozens of flagship hardware wins (to be sure: Nvidia never thought it could be a serious rival to Qualcomm in that space) and Taiwan’s MediaTek has a number of solid wins in devices geared for emerging markets, the last notable win Tegra had was the first-generation of the Nexus 7 and the HTC One X+ (the Surface RT was a flop).
The reasons for Tegra’s lack of liftoff have been discussed at-length in prior press. Tegra’s flaws were well-documented: Tegra 3’s lack of LTE support made it unattractive unless paired with a different baseband, and Tegra 4’s troublesome lack of API support made many vendors uneasy about including the chip in high-end devices. The latest Tegra, K1, had a power draw that was far too high for smartphones and many tablets for it to perform competitively.
Admissions of failure
This begs the question, why didn’t Nvidia try and pivot the focus of Tegra earlier? In a rare candid interview with CNET in May, Nvidia CEO Jen-Hsun Huang admitted that it was time for Nvidia to shift strategies and target other — emerging — markets for Tegra.
“The strategy has shifted, but that’s not quite right. The reason for that is this: First of all, we see that mobile is not about phones only. One of the most important mobile devices is a phone, but mobile technology is revolutionizing [products] all over the place…It’s going to revolutionize TVs,” Huang told CNET. “Tegra 4i wasn’t that successful for us. I would say that when we first started this, we thought that bringing 4G to entry-level phones, mainstream phones, integrated with our apps processor would be a real opportunity. I think that the phone marketplace has commoditized really, really fast. It is not our strategy to go after commodity phones. It is not our strategy to go after mainstream devices.”
Huang later said in the interview that in-car infotainment would be a renewed focus for Nvidia. Nvidia started partnering with automotive manufacturers to get Tegra wins with Tegra 4 and Volkswagen, but that list has now expanded to the likes of Tesla, Audi, and Lamborghini.
Clearly Tegra has a future, but it wasn’t the one that Nvidia originally intended. While Nvidia should have cut its losses earlier and shifted strategies, the fact is Tegra has now found its niche. If Nvidia can find hardware wins for Tegra K1 in more automotives and environments where power draw and heat (the bane of smartphones and some tablets) don’t matter as much, the company should be able to earn back some of the lost treasure it spent on Tegra in its earlier days.