Let’s take a look at Nvidia and what the company did over the past year. For Nvidia the future is Tegra and it was also betting a lot on the ION market, and let’s not forget that the company still makes most of its money from graphics for games.
Tegra is still not extremely popular and the most important design win is still Zune HD and recently launched and killed off Microsoft Kin. Nvidia keeps telling everyone to wait for the second half of 2010 and let’s hope for their sake that there will be some major design wins. We see a lot of potential in tablet business for this product, but not much demand has materialized yet.
ION is the one to worry about as the new Atom offers a much cheaper Broadcom decoder chip that can get you nice HD 1080 playback on a netbook or nettop. Nvidia has a point when it says that its ION graphics core can increase the encoding speed and benefit CUDA applications, but most netbook users don’t really care that much about the extras, they only want fluent 1080p playback. Let's not forget that the original IION 2 chipset with northbridge got canceled last year due Nvidia's legal fight with Intel. The current ION that you can find in Atom N4x0 powered netbook is simply a graphics core that does the graphics work for the machine.
The Geforce business is slowly recovering as the company has launched the first chip that has makes sense and can sell good, the GF104. This sub $199 product is the first product that can sell in nice volumes and help Nvidia to get its market back. ATI has sold 16 million DirectX 11 cards so far and Nvidia has a lot of catching up to do.
There are still two more cards missing, the mainstream GF106 and the entry level GF108 that should sell for some $59.99 and they should ship in millions. Both cards are DirectX 11 and they should do well for Nvidia but they only come in late summer.
Nvidia is doing a great job in mobile computing as its Optimus has won the hearts of almost every laptop manufacturer. Nvidia stole some market share from ATI, even it only has one big mobile GTX 480 that DX11 based, and it's aimed at a niche market. Ironically Nvidia won most of Calpella business with obsolete DX10 rebrands, but this is mostly thanks to power saving Optimus. The sad part for ATI is that they were the first to introduce switchable graphics, but Nvidia’s Optimus simply does it much better.
In early 2011 both AMD and Intel should have CPUs with integrated graphics, let's call them Fusion and the more of these chips gets sold, the less market will remain for entry level discrete graphics. We see trouble for discrete entry level, especially if graphics in Ontario and Llano turn out to be as good as we have reported. The really worrying part is that Nvidia is getting most of its design wins in the low-end, while ATI's mobile 5000 series dominate the premium market and obviously they have higher ASPs and sell at higher margins.Again at the same time Nvidia makes insane money with Quadro, and Fermi quadro is about to launch and take even more market share.
In DirectX 11 market ATI has a predominant market share but Nvidia still ship much more GPUs than ATI, hence makes more money.
Even with 10 months advantage on market beeing the only DirectX 11 in town, they didnt manage to steal much market from Nvidia and that in Q2 2010 Nvidia can end up with as much as 65 percent of the discrete market. Maybe we can blame TSMC for lack of 40nm chips.
With all this in mind, you can only imagine that Nvidia might need an x86 core for the future.