NVIDIA's (Nasdaq: NVDA) move into mobile processors can't be stopped. Thankfully, the company is finally owning up to the magnitude of this shift in focus and opportunities.
"Our investment in mobile computing and parallel computing now drives our growth," says CEO Jen-Hsung Huang. The Tegra family of mobile processors, based on technology from ARM Holdings (Nasdaq: ARMH), is set to generate more sales than system chipsets as early as next quarter -- a major change.
Huang hedged that transformative statement by noting his company's "leadership in visual computing," though Advanced Micro Devices (NYSE: AMD) surely would disagree.
The fourth quarter's $0.23 of non-GAAP earnings per share easily crushed the $0.16 analyst target, though Tegra 2 has only recently begun shipping in volume to tablet and smartphone makers including Motorola Mobility (NYSE: MMI), Samsung, and LG.
If that weren't enough to give Texas Instruments (NYSE: TXN) and Marvell Technology Group (Nasdaq: MRVL) hiccups, NVIDIA also announced that its four-core chip, code-named "Kal-El," but probably destined to become Tegra 3, is already sampling to partners and customers. That puts NVIDIA about a year ahead of other quad-core ARM chips by Huang's reckoning.
There's no doubt in my mind that NVIDIA will soon embrace the mobile market wholeheartedly, making graphics chips into a complementary hobby, rather than the core competency it's supposed to be today. Given where the growth is (and isn't) in the tech sector today, that's not a bad thing at all.
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