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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 Mitch101 on 8/9/2013 12:22:51 PM , Rating: 2
Three things wrong with Surface RT

1. Price (Cant charge $500 for a startup product without keyboard option)
2. Hardware like you said and if I were paying top dollar I would have wanted something more than the Tegra 3 at the time.
3. Lack of Office E-mail application.

Price is coming down and Microsoft is adding e-mail but will be get there before Surface Pro becomes a competitor to Surface RT?

Surface Pro wont have these issues because its full blown Windows they just need to get the price down on Surface Pro which the next gen Intel Atoms might resolve.

RE: why
By chizow on 8/9/2013 2:51:50 PM , Rating: 2
Agreed, MS overpriced both Surface models and overestimated demand for their devices across the board.

RT was almost 100% more expensive than competing ARM/Android tablets and Pro was more expensive than cheaper Ultrabook alternatives, encroaching on MacBook Air territory.

RE: why
By Mint on 8/9/2013 5:50:41 PM , Rating: 2
Well, only the license cost is MS's fault. The rest is the OEMs trying to get a fatter margin.

The real problem with RT is that it's pointless now that Intel has such low power x86 chips. Why use RT when you can put full Win8 on it?

Have you seen Anand's MacBook Air 11 review? Using the tablet browsing test, Haswell lasts longer with a 38 Wh battery and 11.6" screen than the A6X does with a 42.5 Wh battery and a 9.7" screen!

Granted, Retina needs more power per sq. inch than non-retina, but it's still amazing, and we haven't even seen the ULX and ULY processors yet.

Assuming Intel is serious about the low end, Silvermont makes RT completely pointless unless they want to give it away for free.

RE: why
By othercents on 8/12/2013 8:44:55 AM , Rating: 3
I agree with the OP. Why are NVIDIA's hardware chip sales dependent on one software platform? Shouldn't Android be included in this? Maybe NVIDIA is just making an inferior product to other vendors regardless of what software platform it is using.

RE: why
By Reclaimer77 on 8/12/2013 8:52:53 AM , Rating: 2

I was laughed at last year when I opined that Intel would make serious headway in the mobile space sooner rather than later.

But here we are, already.

RE: why
By JPForums on 8/12/2013 9:16:37 AM , Rating: 2
I remember that, though to be fair, I wasn't laughing.
I thought you were spot on, but there was so much anti-Intel/pro-ARM sentiment at the time that nobody would even consider the idea that Intel could achieve competitiveness.

That said, I had hoped Intel would address the graphics situation a little earlier, but C'est la vie.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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