Strategy Analytics, a semiconductor market research firm, recently released a report detailing the top five tablet applications processor vendors by revenue. The results are interesting, to say the least. While Apple sat atop the heap, MediaTek was second, and Samsung came in third, it's the fourth and fifth positions that were truly interesting.
At the end of 2012, both Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) had largely missed out on the tablet market, with players such as Texas Instruments, NVIDIA (NASDAQ:NVDA) – by virtue of their wins in tablets such as the Kindle Fire and Nexus 7, respectively – taking the lead. Of course, TI exited the apps processor business and NVIDIA was late to market with its Tegra 4 (admittedly in order to pull in the development of its Tegra 4i smartphone processor and its Tegra 5 with Kepler graphics), which opened up some opportunities for other players.
Intel's now no. 4
Interestingly, Intel, even with its previous-generation Atom (the next-generation Atom rolls out in publicly available devices next week) that by all measures wasn't much of a superstar managed to score the fourth spot in terms of tablet market share. While it has been clear that Intel owns the Windows 8 tablet space (and will own the Windows 8.1 space), this share gain couldn't be entirely attributed to Windows 8 tablets. Indeed, the company has many lower-end Android designs overseas as well as even a few "bigger" Android wins in the United States (a few models from ASUS as well as Samsung's Galaxy Tab 3 10.1"), which also likely contributed to the share gain.
Looking ahead, it will be interesting to see how Intel's market share position fares as it ramps its next generation Bay Trail products in both Windows 8.1 and Android devices. A move up the market share ladder during the third quarter and especially during the fourth quarter wouldn't be much a surprise, especially as the Windows 8.1 designs are significantly more attractive than the Windows 8 designs based on the prior-generation Atom. An expanded presence in the Android market should also drive share gains.
Qualcomm is no. 5... with a major move up imminent
For the second quarter of 2013, Qualcomm took fifth place in the top five tablet vendor list. That being said, it seems likely that with the Nexus 7 and Amazon Kindle Fire HDX devices (both with high-end Snapdragon 800 processors) ramping through the holiday season, Qualcomm will move very quickly up the ladder. It's too early to guess how many spots it will move up, but a no. 2 or no. 3 showing wouldn't be particularly surprising. It could be argued that the high-end Android tablet market isn't exactly booming at the moment, of course, which means that downward mix shift would favor Intel and MediaTek (the latter is aggressively pricing its last-generation parts, and the former is known for inexpensive processors.)
Will NVIDIA come back?
While it looks like 2013 is pretty much shot for the Tegra 4 as it hasn't found its way into all that many designs (although the Tegra Note could be a surprise winner), 2014 should be better with the introduction of its Logan system-on-chip. Many, including this Fool, believe that this product will drive unequivocal mobile graphics leadership for NVIDIA and as a result will lead it to better traction. NVIDIA's management has also been clear in telegraphing the fact that while Tegra 4 was late (meaning that it couldn't compete for some of the major designs), its next-generation Logan part is on track for an early 2014 release.
The Foolish bottom line
Qualcomm is today's heavyweight smartphone chip champion, and it looks as though it's well on its way to cementing itself as a leader in the tablet space as well. Intel, despite being the oft-discounted PC chip player, is also making some real inroads in this market even with products that are barely competitive. Just imagine what the landscape will look like with a leadership part available on the market. Let's also not forget that NVIDIA could be set to make a roaring comeback, even against fierce competition from the current market leaders. The next 12 months are going to be very exciting in the tablet apps processor space.
Ashraf Eassa owns shares of Intel and NVIDIA. The Motley Fool recommends Apple, Intel, and NVIDIA. The Motley Fool owns shares of Apple, Intel, and 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.