It may seem as if smartphones are everywhere, but we're actually at the mere precipice of a global explosion in smartphone demand. Research firm Five Star Equities released a report in October noting that global smartphone sales had topped 1 billion in the third quarter of 2012 -- a 47% increase over the year-ago period -- and that total units sold were expected to double from current levels by 2015. That's a lot of smartphones and a big spike in demand that many tech companies are eager to meet.

The players
Quite a few of the usual suspects can be found lurking in the forefront, waiting to devour precious market share and claim their piece of the pie.

Qualcomm (QCOM 0.73%), which offers a full array of wireless technologies ranging from CDMA to processing, commands the lion's share of the smartphone processing market thanks to the rapid global growth of Google's (GOOGL 1.27%) Android operating system devices, to which it is intricately tied.

Broadcom (NASDAQ: BRCM) has ample claim to some of the lower rungs of the ladder, supplying many of the 3G processors used in lower-end Android devices for Samsung smartphones. Broadcom hasn't really caught the field yet on 4G LTE processors, but it's doing a solid job of filling in the lower price spectrum.

The underdog
The real surprise of this processing bunch has been the entrance NVIDIA (NVDA 3.65%) has made onto the scene with its Tegra line of processors. The newest chip, unveiled in February and dubbed the Tegra 4i, is a quad-core processor that will suck the life-force out of any battery but will handle video game graphics and images like nobody's business. Sales of its Tegra processors have been phenomenally strong in the face of incredible competition from the likes of Qualcomm and Broadcom. In its fourth-quarter results released in February showed that revenue for Tegra products for smartphones and tablets increased 50% to $541 million, more or less accounting for half of NVIDIA's total sales for the quarter.

Wall Street would have you believe that NVIDIA is struggling under the massive transformation under way in the PC business. The company's first-quarter forecast which called for just $940 million in revenue was well below the Street's forecast and would somewhat concur with that assessment.

More than just graphics
However, NVIDIA has moved far beyond just being a graphics company that's tied to the PC business. Its Tegra 4 processor is a current staple in both Google's Nexus 7, and the Microsoft Surface. Also, NVIDIA's Project Shield, which is set to ship during the second-quarter of 2014, is a gaming device that will place NVIDIA firmly in the cloud and allow it to show off its graphics dominance and the Tegra's amazing speed. In short, NVIDIA is an innovative powerhouse, and the Street is giving it absolutely no respect because it's living in the past with regard to its legacy PC ties.

If that doesn't make you drool with regard to NVIDIA's potential, then perhaps this will: $3.71 billion in net cash! That's right -- nearly half of NVIDIA's market value is derived from its $6 per share in net cash. It's as if the market is completely disregarding the company's potential in smartphones and tablets and focusing on its slower-growing graphics segment -- which, may I add, is still boasting market share of 65%. And that's up from 53% last year. 

NVIDIA is making all the right moves needed to adapt to a changing technology landscape. Sure, it's going to face numerous challenges from Qualcomm's Snapdragon processor, which has dominated in Android OS devices, and the recent introduction of Qualcomm's revolutionary RF360 chip that deals with band fragmentation on the front end. But, ultimately, I see NVIDIA being a winning investment over the long run because of its history of profitability, its strong cash balance, and a long line of innovations that will keep it in the game.