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Nvidia Tegra Sales Soar, But The Chip's Future In The Mobile Market Is Uncertain

According to Nvidia's earnings report for "fiscal 2015" (essentially the year 2014), which ended on January 25, Nvidia saw returns that exceeded the expectations of Wall Street analysts. The company made $4.68 billion in revenue, which was a 13.4 increase year over year. Profit also soared by 43.4 percent year over year to $631 million.

Nvidia still made most of its money from PC GPUs, which represented 85.8 percent of its total revenues in the last quarter. The company's GPU sales grew by 10.7 percent last year to $3.84 billion. Gaming was a strong driver for Nvidia last year, and the company saw an increase of 38 percent for PC and notebook GPUs.

Although its Tegra chips brought only a little over half a billion dollars ($579 million) for the whole year, the company saw its mobile chip sales increase by 45.5 percent. Nvidia credited this sharp rise in sales mainly thanks to its SHIELD tablet and the high interest auto makers seem to have in the company's chips. (Nvidia's automotive chip sales doubled year over year.)

Earlier this year at CES, Nvidia unveiled the Tegra X1, which for now specifically addresses the automotive market. Nvidia believes its visual computing expertise is critical for self-driving cars, because the cars will need to "see" the environment around them and make sense of it in order to drive safely through it.

Nvidia, being one of the few companies that can make chips that are low-power enough yet still deliver incredible graphics performance, seems to have become a good partner for car makers that are ready to embrace the future by taking advantage of advanced mobile technology.

Although the Tegra sales saw significant growth, Nvidia is still considered a relatively minor player in the mobile market, and the company has been almost non-existent in the smartphone market for the past two years. Nvidia has chosen to focus more on high-performance chips and "winning" against other mobile chip competitors through raw performance, but at a major cost in power consumption.

Other chip makers such as Qualcomm and Mediatek have become so successful in the smartphone market because they have made low power consumption a bigger priority than absolute performance. The companies still compete in performance, but only after they've ensured a certain threshold of power consumption which they cannot exceed.

Nvidia, on the other hand, is more concerned with winning in performance metrics at all costs. This has arguably been a strategic flaw for Nvidia that has kept it from gaining significant market share in the mobile market. With its newfound success in the automotive market, Nvidia's future in the smartphone and even the tablet market (which has been in decline lately) is uncertain, but we're looking forward to see what the company has prepared for the Mobile World Congress next month.

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Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.