Analyst sees “challenges” for Nvidia’s Tegra SoC
Analysts at Evercore believe 2013 will be a challenging year for the California-based Nvidia.
According to Evercore analyst Patrick Wang, Nvidia could come under competitive pressure as Apple prepares to introduce new versions of its wildly popular iPad.
"If Tegra-based tablets are unable to gain traction against Apple, Nvidia could be faced with an inventory glut in the coming months," Wang claimed in an industry note obtained by Bloomberg. "Additionally, Google may switch from using Nvidia's Tegra 3 chip to Samsung Electronics Co.'s Exynos 5 in its [future] Nexus 10 tablet."
However, Canaccord Genuity analyst Bobby Burleson disagreed with Wang's seemingly pessimistic assessment.
"We believe moderate upstream adjustments by Nvidia are likely for Tegra where HTC One demand has weakened," explained Burleson. "For tablets, we expect sell-through to remain healthy due to low price points and better performance versus prior-gen Android tablets, while sell-in accelerates on new product launches. Longer term, Nvidia's bundled LTE solution for smartphones should drive design wins as an alternative/second source to QCOM."
Ashraf Eassa expressed similar sentiments in a detailed analysis posted on Seeking Alpha.
"Nvidia's Tegra 3 has already found its way into Google's Nexus 7 tablet and into Microsoft's Windows RT-based Surface. Rumors also point to a win in Amazon's next generation Kindle Fire product," he opined. "While there are certainly risks here, it seems irrational to make such a claim well before the iPad Mini, Surface and Kindle Fire 2 are on the shelves and we see some hard data."
Eassa also noted that the firm's aspirations with its ARM-based Tegra chip for tablets/smartphones, Project Denver for notebooks/desktops/servers, and high performance GPUs leveraged as high performance compute accelerators (Tesla), all represent fairly logical and safe, yet aggressive, growth plays in segments adjacent to the firm's core competency.
"The hard data speaks for itself: Nvidia blew away analyst estimates and guided well. Until the next earnings report (or until Nvidia issues an earnings warning), these analyst 'concerns' seem to be speculative at best and fear-mongering at worst," he added.