How NVIDIA Could Score in Future iPhones

In 2010, Apple (NASDAQ: AAPL  ) integrated its mobile processors and took chip design in-house starting with the A4 in the iPhone 4. Since the iPhone maker comprises a large chunk of the broader smartphone market, that meant an incremental loss to mobile chip vendors that would have otherwise liked to compete for Apple's business. In addition, Samsung has also been increasingly using its own Exynos processors wherever possible in its smartphone lineup, although it still turns to Qualcomm when it needs to.

Combined, Apple and Samsung represent half of the market, with companies like NVIDIA (NASDAQ: NVDA  ) competing for mobile CPU design wins in what NVIDIA's Rob Csongor calls the "other half." To the extent that Apple and Samsung can grow their collective share, that will translate into less opportunity for NVIDIA and Qualcomm, among others, to sell their own processors. With NVIDIA's recent news that it would enter the mobile IP licensing business, that opens up a whole new world of opportunity for the graphics specialist.

Apple's A-chip strategy has entailed licensing CPU cores and instruction sets from ARM Holdings that it pairs alongside GPU designs from Imagination Technologies. There's evidence that Apple has even grander ambitions for its A-chips, which in an extreme case could include ditching Intel (NASDAQ: INTC  ) for its own Mac processors if it can ever reach acceptable performance levels. In addition, the broader computing value chain is favoring high levels of integration nowadays.

All of this translates into the possibility that NVIDIA could theoretically score its GPU IP in future iPhones once its licensing business takes off. There's virtually no chance that Apple would buy a Tegra processor directly for the iPhone, but integrating NVIDIA's graphics technology is a different story altogether.

On the Mac side, NVIDIA already powers the newest Macs with discrete graphics cards, but Apple continues to push toward integration as much as possible. For example, Apple moved away from discrete graphics in its Mac Mini family in favor of Intel's integrated HD 4000 last year. The possibility of licensing and integrating GPU technology from NVIDIA gives Apple a whole new route to consider if it wants to abandon Intel.

It's a smart move for NVIDIA to create a new revenue stream from its strong position in graphics, and the company can now potentially serve up graphics in a future iPhone.

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  • Report this Comment On July 05, 2013, at 7:37 PM, melegross wrote:

    I don't understand this article. What is being said here? Will Apple abandon Imagination Technologies, a company that Apple owns 11% of, and who has the best GPU IP in the business for mobile, and move to Nvidia, who is easily beaten in its GPU performance by Imagination?

    Why exactly would that make sense? And what does it have to do with Apple's x86 based computers? In addition, Apple has an ARM architectural license, which is what needed when designing your own ARM chips. Only a handful of companies have that.

  • Report this Comment On July 05, 2013, at 10:28 PM, tempest669 wrote:

    This article is nonsensical. Imagination (IGNMF) has around 10% ownership by Apple, and I think 8 or 9% by Intel. Most of Intel's integrated graphics are powered by IGNMF. I have not seen any confirmation of it, but Intel's Haswell looks like it is also powered by IGNMF's newest GPU.

    The most likely scenario to me is that Apple will drop ARM altogether, and either buy IGNMF, or begin to license IGNMF's newly acquired MIPS processor. IGNMF's PowerVR GPU's have been powering Iphone's since inception and they're no slouch. For any gamers out there, PowerVR was the brainchild behind the Kyro II chipset.

    It strikes me more interesting that NVDA has no choice buy to begin licensing their technology because they have few other alternatives to expand their presence. I think the bigger question is: Why has IGNMF went under the entire stock markets radar for the last 10 years?

  • Report this Comment On July 05, 2013, at 11:00 PM, Henry3Dogg wrote:

    @tempest669

    Why would Apple from ARM?

  • Report this Comment On July 06, 2013, at 1:28 AM, tempest669 wrote:

    @Henry3Dogg

    I'm sorry, I'm not sure what you're asking. Are you asking would Apple leave ARM?

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