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Nvidia expects significant declines in Tegra profits for fiscal 2014

NVIDIA recently announced that it is expecting a significant drop in its Tegra chip revenue this year. NVIDIA is predicting that revenue may drop as much as 40% and is laying the blame for that significant drop at Microsoft's feet citing poor Windows RT adoption as the cause.

"We don't expect as much return from the investment as we had hoped," NVIDIA CEO Jen-Hsun Huang said this week.

Microsoft and NVIDIA worked together closely to ensure that Windows RT would work on the NVIDIA Tegra 3 chips. Lenovo was one the manufacturers that produced a tablet that used NVIDIA's chips, but that tablet, the Yoga 11, was yanked from Lenovo’s online store.

NVIDIA posted revenue for its Tegra line in the last fiscal year of around $750 million. The expectation is for revenue from the chip family in fiscal 2014 to be $200 million to $300 million less than last year.

Despite the fact that revenues are expected to significantly declined for NVIDIA's Tegra line, NVIDIA continues to work with Microsoft on the second-generation Surface tablets. Jen-Hsun Huang says that NVIDIA is working very closely with Microsoft to make Surface 2 a "big success."

If NVIDIA is onboard with Surface RT 2.0, we’re likely to see Tegra 4 as the brains behind the machine.

Sources: Computer World, CNET

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By Guspaz on 8/9/2013 11:14:30 AM , Rating: 2
Why is there even a Surface RT 2.0 in development? The first generation didn't fail because of hardware problems. I think Anandtech's tests with Haswell battery life proved that a Haswell-based Surface Pro that's price and size/weight competitive with Apple and Android tablets is where Microsoft should be focusing.

RE: Why?
By karimtemple on 8/9/2013 11:28:28 AM , Rating: 2
An RT 2 is in development because RT isn't going anywhere. As far as Microsoft is concerned, Windows 8 is a version of RT that has legacy compatibility features added on. Windows Runtime is the future of Microsoft.

All they'll be doing from now on is trying to figure out how to 1) get it a foothold and 2) convince people to move to it, not only as opposed to competing platforms, but as opposed to Win32 as well. There will continue to be a Windows Proper and a lower-priced Windows RT alternative, even when there's a Windows 9 and Windows 10, until everyone finally gets off the Win32 boat.

RE: Why?
By Luticus on 8/9/2013 11:54:08 AM , Rating: 3
well to that i say, good luck. Windows primary advantage is it's legacy support. Literally the only reason i'm not on linux primarily is because of all the software that works on windows and will likely never see a linux port. So it's either win32 for me... or linux

RE: Why?
By karimtemple on 8/9/2013 12:12:17 PM , Rating: 2
Agreed. But trudging along with Win32 indefinitely obviously wasn't going to cut it. They were right to try to move things along -- they were right to aim for a lot of the things they aimed for -- it's just that they're abysmal at execution.

And to be honest, it isn't really that problematic that there's a Windows proper and a Windows RT. It makes sense for them to stick with it until they can figure out a valid value proposition. The actual problem is that the clock is ticking; they can't just goof off and stumble around on this forever.

This stuff would've happened to a much worse degree if they hadn't acted as soon as they did. Lugging Win32 into the future would've seen them eventually shrivel up from starvation as the Operating System will no longer be a monolithic cash cow that no one wants to bother with. Everybody's got an OS these days.

The Windows business model was approaching a brick wall and Microsoft took action before it was too late. The tragic thing is that it was stupid action. Perhaps they end up crashing (and starving) anyway.

RE: Why?
By embedded_bill on 8/9/2013 12:29:41 PM , Rating: 2
Most would agree that legacy support is the primary advantage, but I think that it is also a boat anchor.
Apple cut native support when it migrated to OS X, it almost killed the company but turned out to be a great move for them, eventually.
Maybe Microsoft should consider a similar move and support legacy apps through a tranlation layer... not saying it would work, but it might.

RE: Why?
By inighthawki on 8/9/2013 10:37:22 PM , Rating: 2
Win32 is never going away. Eventually if they port all their RT runtime components to allow desktop app development you may see stop actively "developing" on Win32, but it will never go away. The day it goes away is the day nobody buys Windows, and even Microsoft knows that.

RE: Why?
By Flunk on 8/9/2013 12:21:28 PM , Rating: 2
I'm sure they're release both, Microsoft has enough money to keep making things even if no one on earth buys them. The Surface RT is there to have price parity with Android tablets as well as to make the Surface Pro look better.

Microsoft hasn't given up on Windows RT yet, if they gave up after one failure they wouldn't be selling half the things they are now. Take a look at the Xbox, the first generation lost them millions of dollars but the second became the best-selling console of it's generation.

RE: Why?
By OoklaTheMok on 8/9/2013 4:02:34 PM , Rating: 2
For a v1 product, I think the Surface line is pretty good. Does it need adjusting, of course. The first iPad and Android tablets weren't perfect out of the gate either, but they got better.

I love my Surface RT, and I use it constantly. There are so many things I can do on my Surface that I can't do on an iPad, and with the 8.1 preview, it got alot better. It's not perfect, and there are plenty of things I hope to see in a Surface RT v2.

As history has shown us, Microsoft has a track record of getting things right eventually in the v2 to v3 timeframe. Look at Windows Phone, for example. It was missing plenty of things in the initial release, but now it has general parity with iOS and Android, even though each has features that the others don't. This is a game of chess, not checkers.

RE: Why?
By w8gaming on 8/9/2013 10:43:02 PM , Rating: 2
If Microsoft wants RT to be at a price parity with Android, they seriously need a good device at the cheap $200 price point. Or they will never succeed.

RE: Why?
By Ktracho on 8/9/2013 12:39:29 PM , Rating: 3
For the simple reason that the price of a full blown Windows tablet cannot compete with budget Android tablets due to the cost of Intel CPUs. If Microsoft does nothing, Android will overtake Windows, Apple will continue to make great products, and Microsoft will be relegated to third place. Microsoft has to at least fight.

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