NVIDIA Wins an Interesting Phone Design

The fruits of NVIDIA's (NASDAQ: NVDA  ) labor in the smartphone space are finally beginning to pay off. With the release of NVIDIA's Tegra 4i, an integrated LTE baseband and applications processor, NVIDIA expands its total addressable market to more mainstream handsets (albeit the higher end of the "mainstream" band). This drives an incremental revenue opportunity and, more importantly, gives investors reason to be confident that this heavy investment in Tegra will pay off.

Say hello to the LG G2 mini
The original LG G2 was a very well-received phone, particularly as it sported an attractive screen and fast processor, the Qualcomm (NASDAQ: QCOM  ) Snapdragon 800, in a competitively priced package from Verizon (NYSE: VZ  ) . The interesting thing about this product is that it is a 5.2-inch "phablet," which may appeal to many users. But, other consumers may want a smaller, more compact device, and that's where LG's upcoming G2 mini comes in.

Source: Android Planet

This isn't a small device by any means, but it sports a 4.7" display, which is nearly 10% smaller than its more premium sibling. It also sports a much lower resolution screen (950x540 versus its bigger sibling's 1920x1080), 1GB of RAM (down from 2GB in the G2), and is generally a "cheaper" device. However, perhaps the most interesting thing about the LG G2 mini is its applications processor.

Tegra 4i wins the Latin American version of the G2 mini
The next-generation LG G2 actually sports a different applications processor, depending on the geographic region in which it's being sold. The standard LTE and 3G versions will sport Qualcomm's MSM8926 and MSM8226 chips, respectively. However, the Latin American LTE version will sport an NVIDIA Tegra 4i, which integrates four ARM (NASDAQ: ARMH  ) Cortex A9 CPUs and NVIDIA's GeForce ULP GPU. Interestingly, from a performance perspective, the Tegra 4i is notably faster than Qualcomm's chips, but it seems that LG was more comfortable having Qualcomm's chip in the rest of the markets.

Keep in mind that NVIDIA is relatively unproven in the smartphone market (in particular, this is NVIDIA's first integrated LTE modem), while Qualcomm and its modems are pretty well-established. It stands to reason that NVIDIA's parts will be taken for a "test drive" in certain regions and, if everything goes smoothly, the company will have a chance of winning more important designs and gaining wider distribution. In short, the LG G2 mini appears to be the first major design win with the Tegra 4i and seems to indicate that NVIDIA and LG may expand their relationship further.

Foolish bottom line
It's been a long wait for Tegra 4i, but it's here and it's more than credible. While NVIDIA still has a long way to go before it can be considered a truly first-class smartphone applications processor player, and while the competition is extremely fierce, NVIDIA is making great progress. Investors should be excited for what the future will bring for NVIDIA and its stock in the years ahead.

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