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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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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.

"So if you want to save the planet, feel free to drive your Hummer. Just avoid the drive thru line at McDonalds." -- Michael Asher

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