Is NVIDIA Corporation (NVDA) About to Lose Its Tablet Kingdom?

Will Qualcomm snap the Tegra?

Pacific Crest analyst Michael McConnell is of the opinion that competitive pricing and integration of the 3G/4G modem on the Snapdragon should help Qualcomm unseat NVIDIA from the heart of the next Nexus 7. And this is the very reason why Qualcomm enjoys a significant lead over NVIDIA. While NVIDIA has finally woken up to integrating a modem with the Tegra now, Qualcomm has been doing so from much before and that too in an aggressive manner.

No doubt that NVIDIA expects the LTE-integrated processor market to grow at a terrific pace this year, but in reality it is far behind Qualcomm. When Qualcomm launched its latest batch of Snapdragons, it already had more than fifty design wins in the bag while it seems that the Tegra 4 is finding it difficult to sell itself.

Thus, if NVIDIA loses out on the next Nexus 7, it might see its tablet processor market share decline since other non-Apple tablet leaders probably aren’t looking at NVIDIA at the heart of their devices. As far as smartphones are concerned, the lesser we speak about them the better since what applies to the tablet market mirrors into smartphones for NVIDIA.

The bottom line

Analysts at Needham, who downgraded the stock to a “hold” after results, summed up NVIDIA’s woes perfectly as they don’t see much Tegra growth and invasion of Qualcomm into NVIDIA’s tablet space. Moreover, it’s been one year since I first pointed out concerns about NVIDIA’s business, and those concerns stand multiplied today.

The stock has lost almost 23% in the past one year, which vindicates my opinions apart from hitting home the fact that NVIDIA faced an uphill task then and faces a much more difficult mobile future now.

The article Is NVIDIA About to Lose Its Tablet Kingdom? originally appeared on Fool.com and is written by Harsh Chauhan.

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