Nvidia pushes out graphics IC for iPod
Mark LaPedus
(11/30/2006 11:33 AM EST)
URL: eetimes.com
SAN JOSE, Calif. — Nvidia Corp. is moving into unsteady waters. The company is readying a lower-margin integrated chipset for PCs, while it has also delayed a graphics chip for use in Apple Computer Inc.'s next-generation video iPod line, according to an analyst.
''We have talked about Nvidia replacing Broadcom for the next-generation Apple video iPod socket in July 2006,'' said Satya Chillara, an analyst with Pacific Growth Equities LLC. ''At this point, our checks indicate the mobile graphics processor tape out has been pushed to Q2/Q3 of CY:07, from Q1 of CY:07. We think this could cause some instability to Nvidia's revenue momentum for the first half of CY:07.''
What impact this will have on the next-generation video iPod is unclear. Consistent with previous speculation, Nvidia (Santa Clara, Calif.) has seen its graphics processor designed into next-generation video iPods, which are due out next year. In the new video iPod, the application processor will be supplied by South Korea's Samsung Electronics Co. Ltd.
Besides the iPod, Nvidia faces another hurdle. ''Based on our checks, we believe that Nvidia now has chipsets to attack the low end integrated Intel-based chipsets,'' Chillara said in a report.
''There are three reasons why we believe it might be premature for Nvidia to attack the low-end Intel-based chipsets,'' he said. ''First, we believe Nvidia cost structure for these low end IC's is not as efficient as their AMD-based chipsets. Moreover, we estimate that Nvidia's high cost structure could persist for the next two quarters. Second, in our opinion, the gross margins in this space will be challenging and pose a risk to performance.''
The low-end, integrated Intel-based chipsets produced by ATI Technologies had gross margins of around 15 percent, he said.
It's been a wild ride for Nvidia in recent times. Recently, the company pushed the boundaries of PC graphics at both ends of the spectrum by launching a novel processor architecture and buying PortalPlayer Inc. for $357 million.
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