Apple, AMD, & Qualcomm Should Be Worried About NVIDIA's New Mobile Powerhouse

NVIDIA minced no words with the launch of Tegra K1. Here's why Apple, AMD, and Qualcomm should be scared.

Steve Symington
Steve Symington
Jan 8, 2014 at 10:30AM
Technology and Telecom

Go ahead & count 'em. NVIDIA's new Tegra K1 mobile processor has 192 GPU cores. Source: NVIDIA.

Ever wonder what it would look like to cram the same technology that drives the world's 10 most energy-efficient supercomputers into a mobile device?

Well buckle up, tech junkies, because the folks at NVIDIA (NASDAQ:NVDA) are about to show you.

To be sure, they simply couldn't wait for this year's Consumer Electronics Show in Las Vegas, where, in their words, they eagerly "ripped the lid off" NVIDIA's new Tegra K1 mobile processor.

And can you blame them? With 192 Kepler graphics cores at its heart, the Tegra K1 is an absolute beast.

In fact, NVIDIA CEO Jen-Tsun Huang claims the Tegra K1 not only offers significantly faster performance than an Xbox 360 or PlayStation 3, but also delivers the "same graphics features as" the Xbox One and PlayStation 4. Naturally, Huang was also quick to note each of the platforms use chips provided by the veritable Advanced Micro Devices (NASDAQ:AMD)

If you thought the A7 was fast...
At the same time, he says, the Tegra K1 is 1.5 times more power efficient than both Qualcomm's (NASDAQ:QCOM) Snapdragon S800 and Apple's (NASDAQ:AAPL) A7 mobile processors. And for all you gamers out there, Tegra K1 is apparently three times faster than Apple's A7 at rendering Epic Games' widely used game engine, Unreal Engine 4. 

Perhaps that's why Epic Games' founding CEO Tim Sweeney has already chimed in, saying, "We can take absolutely anything that runs on PC or high-end console and run it on Tegra. I didn't think that we'd be at this level on mobile for another three to four years."

The multibillion-dollar question
But why, exactly, has NVIDIA singled out Apple, AMD, and Qualcomm?

First, remember Apple has gradually moved away from NVIDIA's high-margin discrete GPUs over the past few years, namely through introducing lower-cost integrated graphics from Intel (NASDAQ:INTC) in the latest versions of its lower-end iMacs, Mac Minis, and most recently its 15-inch Retina MacBook Pro.

I certainly wouldn't expect Apple to replace its reasonably powerful in-house mobile processors with an NVIDIA chip, but the K1 will certainly put pressure on the folks at Cupertino to improve the A7 in short order.

Then there's AMD, whose shares plunged in October when the chip giant beat earnings expectations, but left investors worried when lower notebook and chipset unit shipments led a 6% sequential decline in its Computing Solutions segment. Meanwhile, only a few days earlier, shares of Intel had rallied after its own PC segment revenue gained 3.5% from the prior quarter.

And while AMD has shown little interest in entering the smartphone space, at least investors could take some comfort in knowing their company was looking for design wins in the tablet realm for its semi-custom chips. Now, however, I can't imagine how AMD must feel with NVIDIA touting a mobile chip that can perform anywhere near as well as its desktop-centric offerings.

Worse yet, NVIDIA has made it clear it's not content with just smartphones, which is why it wasted no time unveiling a new Tegra K1 reference tablet to give OEMs a nice head start on integrating its new chip into their devices:

NVIDIA's new Tegra K1 reference tablet design. Source: NVIDIA.

Finally, there's Qualcomm, which not only took full advantage of NVIDIA's Tegra 4 delays last year by securing a coveted spot in Google's second-gen Nexus 7, but has also kept up the pressure over the past several months by panning the performance of Microsoft's Tegra 4-powered Surface 2.

Now with its feet firmly underneath it, you can bet NVIDIA's more than happy to take a few jabs at Qualcomm's Snapdragon lineup while it still has the upper hand.

Foolish takeaway
But don't get me wrong; it's also safe to assume Apple, AMD, and Qualcomm won't be resting on their laurels as NVIDIA passes them by in this high-stakes game of cat and mouse. After all, NVIDIA is only expecting the first devices featuring the 32-bit Tegra K1 to arrive in the first half of this year, while a 64-bit version should start shipping sometime in H2.

As a result, by letting everybody know of its new standard in mobile performance with this week's announcement, NVIDIA is all but ensuring its competitors have ample motivation to push the envelope further than ever before.

Still, that's also why I'm more than happy personally owning shares of this innovative company, and can't wait to see where its technology leads us next.