OK, Microsoft (Nasdaq: MSFT ) won't do much damage to the Apple (Nasdaq: AAPL ) iPhone with the release of the Zune HD media player. In fact, it probably won't even dent the iPod Touch, which is a closer rival in the pure media-player space.
Nonetheless, the Zune HD will serve as an important showcase for chip designer NVIDIA (Nasdaq: NVDA ) . It's the first gadget built around NVIDIA's Tegra chip, which squeezes specialized audio and video processing processors onto the same piece of silicon as the central processing unit (CPU). Tight integration makes for smaller, sleeker, and less battery-draining gadgets, so the Tegra comes with built-in selling points.
The Tegra chip is positioned to become a major revenue driver for the plucky chip designer, if you listen to CEO Jen-Hsun Huang. NVIDIA says that there are "more than 50" Tegra-based consumer products in the works, including netbooks, smartphones, and portable navigation devices.
In the future, some of these devices will run the Android software platform, backed by Google (Nasdaq: GOOG ) and a wide supporting cast. The Open Handset Alliance, which is the official steering committee for Android, is a "who's who" of technology that includes NVIDIA, handset maker Motorola (NYSE: MOT ) , GPS expert Garmin (Nasdaq: GRMN ) , and overall gadget guru Samsung, just to name a few.
In other words, I wouldn't be surprised to see the next generation of Garmin navigation devices and Motorola smartphones rocking a Tegra chip from NVIDIA. NVIDIA is facing a tough battle to win contracts away from incumbents like the Qualcomm (Nasdaq: QCOM ) SnapDragon and Texas Instruments' OMAP chips, but NVIDIA's products come with brand-new graphics processing powers that could set the Tegra apart from the competition.
The Tegra looks like a capable cash cow for longtime Stock Advisor pick NVIDIA.The stock has nearly doubled investors' money in four years, despite the debilitating crash of 2008. NVIDIA is on the bubble between four and five stars in Motley Fool CAPS, with a 95% approval rating among more than 4,500 of your fellow investors. Will the Tegra put NVIDIA back on track to multibagger gains? Share your thoughts in the comments box below.