Last week, chip maker NVIDIA (NASDAQ:NVDA) finally unveiled the long-awaited Tegra 4i integrated LTE mobile processor (previously code-named "Grey"). The introduction of Tegra 4i will finally allow NVIDIA to compete seriously with Qualcomm (NASDAQ:QCOM) as a provider of mobile processors for smartphones. Qualcomm has had a virtual monopoly on integrated LTE chips for the past year, which has allowed it to build up a dominant position in the smartphone market.

Thus far, NVIDIA's heavy research and development spending in Tegra processors and Icera modems have outstripped sales gains. Even in last year's Q3 -- the best quarter ever for Tegra sales -- the company's consumer products business (which included Tegra) lost more than $40 million. The integration of an LTE-capable modem and a Tegra mobile processor will hopefully be the final piece of the puzzle that puts NVIDIA's Tegra division in the black. The Tegra 4i will increase NVIDIA's addressable market, and will also have a beneficial impact on NVIDIA's business by cutting down on the seasonality of the Tegra tablet business.

Product features
Compared to its cousin Tegra 4, the new Tegra 4i system on a chip is optimized for efficiency rather than power. The Tegra 4i uses the older A9 core rather than ARM's next-generation A15 design, has 60 GPU cores (compared to 72 in the Tegra 4) and is somewhat slower overall. However, the CPU is less than half the size of Tegra 4, which reduces costs and improves power efficiency.

The more important comparison, however, is with the competition. NVIDIA is taking aim at Qualcomm's top-of-the-line Snapdragon 800 chip. NVIDIA claims that Tegra 4i will deliver significantly better performance than the Snapdragon 800 despite being half its size. This is an impressive accomplishment. However, Qualcomm's Snapdragon 800 will be shipping in devices by mid-year (and its somewhat lower-performing Snapdragon 600 cousin will come to market even earlier). By contrast, Tegra 4i is not expected to ship in devices until this fall. In the fast-moving smartphone market, this could mean that NVIDIA misses out on design wins for phones shipping earlier in the year.

Financial impacts
In a conversation with me earlier this month, NVIDIA's investor relations team pointed out that the tablet business is very seasonal. A new generation of tablets is released each year, with production ramping up during NVIDIA's Q2, peaking with the holiday build cycle during Q3, and then ramping down in Q4. This leads to sequential declines in tablet-oriented revenue in Q4 and Q1 of most years, but operating expenses remain at the same level as product development continues.

In this respect, the late 2013 release of Tegra 4i will be helpful. The chip will be ramping into production just as Tegra 4 production is dropping off at the end of the holiday tablet build cycle. If NVIDIA can snag a high volume smartphone design win for this fall or winter, that will already be a significant accomplishment. Taking significant market share away from Qualcomm is the ultimate goal, but that will likely be a longer-term process.

Fool contributor Adam Levine-Weinberg owns shares of NVIDIA. The Motley Fool recommends NVIDIA. The Motley Fool owns shares of Qualcomm. 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.