Sales of Nvidia Tegra Application Processors Drop Dramatically

From X-bit Labs: Nvidia Corp.’s entrance into the market of mobile application processors has been pretty hard, but rather fruitful. On its peak, Nvidia’s Tegra business earned nearly a quarter of a billion per one quarter. However, in its most recent quarter Nvidia reported a sharp decline in Tegra business revenues, a result of ramp down of Tegra 3 and the delay of Tegra 4 shipments.

As announced in May, Nvidia had a “trough” in Tegra sales in Q2 FY2013 because it delayed revenue sales of Tegra 4 system-on-chips in a bid to speed up shipments of Tegra 4i by around six months. As a consequence, the company faced declines in sales of Tegra 3 application processors and could not offset the drop with any new revenues from new-generation products. The Tegra SoC business had revenue of $52.6 million, down 49% sequentially and down 70.7% year over year.

“These decreases were largely due to lower unit shipments of Tegra 3 processors as customers ramped down production of Tegra 3-based smartphones and tablets, as expected. They also reflect lower revenue associated with the sale of embedded products and game consoles, offset by increased revenue from automotive products,” said Karen Burns, chief financial officer of Nvidia.

During the second quarter, Nvidia ramped up production of its next-generation processor, Tegra 4, in support of new devices coming from its customers in the second half of the year. On July 31, Nvidia also began customer shipments of Shield, an Nvidia-branded game console.

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