Nvidia CEO: No Mobile Strategy Means "Deep Turd"

Tuesday Nvidia president and chief executive officer Jen-Hsun Huang said that a vast majority of the company's revenue will be generated by its mobile processor business and not its long-standing graphics card division. In fact, revenue from Nvidia's mobile chip arm is expected to grow to $20 billion by 2015 – its PC-based GPU business will only grow to $7 billion in the same timeframe.

Those numbers speak volumes about where the industry focus is pointing. Nvidia, a company that literally helped transform the desktop and laptop sectors over the last two decades, is looking to the mobile sector for most of its income, seemingly mirroring the game industry's focus on consoles (rather than PC gaming) because that's where most consumers are spending their money.

"If you don't have a mobile strategy, you're in deep turd," Huang said. "If you're not in mobile processors now, you're seven years too late."

Does this mean the desktop sector will eventually die? Based on previous reports, Nvidia has said that there will always be a market for the enthusiast who wants top-of-the-line hardware that pumps out picture-perfect graphics at 60 frames per second. And while we'd like to believe that these consumers are what drives the industry forward, the shift to mobile computing speaks otherwise. Still, as Huang points out, cameras in smartphones didn't kill off the digital-SLR business – they only drove the need for higher picture capture capabilities.

Seemingly propelling the mobile market is Google's Android OS. Speaking to a roundtable of reporters on Tuesday, Huang said that Android-based tablets will make up half of the market in four years despite their slow start, achieving the same market saturation as Android-based phones. Tegra chips are already installed in half of the high-end Android smartphones and 70-percent of the Android tablets. Yet there's still an addressable market of 100 million devices that need mobile processors this year alone, a number which is expected to balloon to around 1 billion by 2015.

"The future for computing is visual and mobile, and we are well positioned to lead in this new era," Huang said Tuesday after the company said that it anticipates revenue of $4.7 billion to $5.0 billion in fiscal year 2013, which begins Jan. 30, 2012. Company growth is expected to be fueled by additional mass-market smartphones, computers running on more efficient ARM chips, and the saturation of energy-efficient ultra-thin notebooks in the coming years.

Right now Nvidia sees Qualcomm as the only competitor, the only other "person actively on the dance floor." Now that HP has divided up its webOS division, the global OEM doesn't appear to have a clear mobile strategy. Intel isn't considered much of a threat either given that the company has chosen to stay within its x86 roots while most of the smartphones and tablets available on the market are based on ARM's licensed architecture (and mobile applications are written based on ARM's instruction set).

"They're speaking the wrong language," he said. "We're not worried about them at all."

Create a new thread in the US News comments forum about this subject
This thread is closed for comments
22 comments
Comment from the forums
    Your comment
    Top Comments
  • doron
    When I see quotes from this CEO I always get the feeling that he's a complete idiot.. Probably not but still..

    On topic, I believe that since the mobile sector is getting more and more saturated it would be wiser for AMD and Intel to do just what they seem to be doing: Optimize their current line of cpus towards better architecture and power efficiency and creep down safely into the mobile world. That way they'll be less threatened by arm when they go up to the more performance-oriented server and consumer market and lay stronger foundations on their entire business.

    The fact that you're first into something doesn't mean you're better.
  • Anonymous
    It's quite dangerous to underestimate a potential competitor 1000 times as rich as Nvidia is. If Intel wants to be relevant in the mobile sector I don't see what will be in their path - certainly not nvidia which it could purchase any day btw.
  • Anonymous
    I don't see why people think these numbers mean the death of the desktop. Desktops are fairly ubiquitous in the US now, so it's not like they have much expansion left there. The mobile market is developing so fast they can milk money out of that for a while. Just because one market can expand does not mean other markets will die...
  • Other Comments
  • doron
    When I see quotes from this CEO I always get the feeling that he's a complete idiot.. Probably not but still..

    On topic, I believe that since the mobile sector is getting more and more saturated it would be wiser for AMD and Intel to do just what they seem to be doing: Optimize their current line of cpus towards better architecture and power efficiency and creep down safely into the mobile world. That way they'll be less threatened by arm when they go up to the more performance-oriented server and consumer market and lay stronger foundations on their entire business.

    The fact that you're first into something doesn't mean you're better.
  • Thunderfox
    Intel's process technology may eventually make x86 viable in mobile devices, but it's questionable whether its performance superiority will ever matter enough to make it necessary. Intel can obviously beat Arm clock for clock, but at what power cost?

    Just because you can make a working x86 phone or tablet doesn't mean it will run as cool or as long as an arm device, and the average user cares a lot more about that than the internals of these sorts of devices.
  • Archean
    Absolutely true doron, but all those ABs playing idiots just don't understand what the word 'performance' actually means.