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Investors not keen on Nvidia’s computing plans

ARM market too contested
Despite Nvidia’s great showing at CES and a series of important design wins for Tegra 2, investors are starting to see beyond the hype.

Tegra 2 is one of few dual-core mobile parts available today, and Nvidia is also expected to launch the much more powerful Kal El by the end of the year. However, analysts are starting to express their doubts about Nvidia’s ambitious plans.

Despite a good showing in the days following CES, Nvidia shares have lost quite a bit of value in recent weeks. Investors are cautious and fully aware that Nvidia will face stiff competition from the likes of Qualcomm, Texas Instruments and other ARM players. In addition, Google’s Honeycomb was delayed. Worse yet, Honeycomb tablets are not the iPad killers some hoped for. Most are quite pricey and they are now pitted against Apple’s new dual-core iPad 2.

In addition, Nvidia is hoping to introduce Project Denver, a new architecture aimed at HPC and super-computer builders. CEO Jen Hsun Huang believes Nvidia will manage to increase its computing market six-fold in the near future. He stressed that the personal computing industry is no longer Nvidia’s primary focus. Huang also hinted that Kal El could power next generation notebooks and it’s clear Nvidia will do its best to aggressively enter the new market.

Of course, the entire market is limited in terms of OS compatibility, but Nvidia and other ARM chipmakers are looking forward to new Microsoft operating systems, which could level the playing field and offer a much broader market for the ARM architecture. However, all this is a few quarters or years down the road and in the short term ARM chips will remain reserved for specific markets only.

More here.


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