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Will NVIDIA's Super Chip Save the Day?

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If you're in a war, it helps to have Superman on your side. NVIDIA (Nasdaq: NVDA  ) said yesterday at an investor conference that it has begun shipping its quad-core mobile chip and that tablets based on the design should be available in time for the holiday shopping season.

Code-named "Kal-El," after the birth name of the fictional superhero, the newest Tegra chip is designed to give makers of Android phones and tablets an edge over Apple's (Nasdaq: AAPL  ) iPad and would-be rivals from Research In Motion (Nasdaq: RIMM  ) and Asian manufacturers.

CEO Jen-Hsun Huang seems confident, betting big on Google's (Nasdaq: GOOG  ) operating system, using his speech at the conference to give fiscal 2013 revenue guidance that was well ahead of Street forecasts. NVIDIA now expects $4.7 billion to $5 billion in sales. Analysts had been calling for $4.45 billion.

The implication? NVIDIA sees a huge market for Android devices. Huang, in particular, said he expects Android tabs to get more functional and grab 50% of the overall market by 2015, trade magazine eWEEK reported.

NVIDIA is also planning on supplying Tegra designs to makers of Microsoft's (Nasdaq: MSFT  ) Windows 8 tablet. Add it up, and you've got a chip maker that's trying to be to tablets what Intel (Nasdaq: INTC  ) has been to PCs. Or as Huang put it: "Aside from the two of us, there's really not too many people actively on the dance floor ... It's mostly us and Qualcomm (Nasdaq: QCOM  ) competing for most of the slots."

Gauntlet dropped. Good luck, Mr. Huang. This battle is going to get interesting.

Do you agree? Disagree? Please weigh in using the comments box below. You can also keep tabs on the mobile chip market by adding these companies to your Foolish watchlist:

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by@milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Qualcomm, Google, Research In Motion, Microsoft, and Apple. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, NVIDIA, Intel, and Google. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Motley Fool newsletter services have recommended writing puts in NVIDIA. Motley Fool newsletter services have recommended creating a diagonal call position in Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (6) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 08, 2011, at 7:58 PM, bsimpsen wrote:

    "Aside from the two of us, there's really not too many people actively on the dance floor ... It's mostly us and Qualcomm competing for"...

    The crumbs left by Apple?

  • Report this Comment On September 08, 2011, at 8:05 PM, PKA123 wrote:

    What I take into account is Nvidia's ability to remove weaker competitors from the market place due to their aggressive product launch cycle and product feature set to help develop industry standards. QCOM better step up their game a bit. With TI dropping their guidance and outlook and NVDA saying "we're solid for growth". Seems that NVDA is already shacking up the big semi market as they did to the graphics market.

  • Report this Comment On September 08, 2011, at 10:31 PM, ConstableOdo wrote:

    I'd say there would be some possibiity of Android tablets grabbing a lot more market share by 2015. However, by that time Apple should have a market cap of around $450 billion with about $150 billion in reserve cash and probably won't care much about the low-end tablet market as they'll be on to some other device by then.

    By early 2012 Apple's A6 processor should be more than equal to the task of competing against the Kal-El quad-core processor. Those rival tablet vendors are still going to have to meet a price point where they can make some profit and Apple will still have the upper hand thanks to Apple's economies of scale.

  • Report this Comment On September 08, 2011, at 11:21 PM, russfischer1013 wrote:

    That A6 chip will be made on the Intel 22nm Trigate process and will out perform anything else on both speed and power. NVDA, QCOM, and their foundry TSMC will suffer a great deal.

    Apple, Intel and Micron cooperating will stop Samsung in computing devices.

  • Report this Comment On September 09, 2011, at 12:17 AM, bribri435 wrote:

    NVIDIA, definitely has entered this handheld space in a huge way. Coming from nothing a few years ago to being a top competitor is quite a fast momentum just like NVIDIA took over other markets. Those who remember the GPU space in the early days, there were a dozen or so folks in that space now just a few left. The same will happen with the mobile handheld space. Apple has there own huge market share, so will NVIDIA. At the end of the day, competition is awesome, nice to see a fresh face showing everyone how it can be done. NVIDIA has all the tools to push ahead, they offer something unique starting with Kal-el and I think the world will be surprised to see what is possible in a few watts.

  • Report this Comment On September 11, 2011, at 7:37 PM, techy46 wrote:

    "A6 chip will be made on the Intel 22nm Trigate process" that would certainly mean that Intel's fabbing Apple's A6 but I don't see it that way. I think Intel's more interested in Atom SoC 3D at 22 nm for Windows 8 tablets followed by WP8 Nokia phones. Let's see how the Windows 8 tablet mix shapes up between Intel, Nvidia and Qualcomm before we start putting Intel Inside iPads.

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