Nvidia has announced that they are moving to a licensing business model for their chip designs and visual patents, saying that the move will allow their technology to better penetrate markets that it could not enter on its own – mobile and tablet PC. This bodes well for gamers who may well benefit from some solid gaming power in future smartphones and Tablet PCs.
They’ve essentially copied the way ARM does things and are following AMD in allowing customers to approach the graphics company and ask for custom designs and usage rights for their technology.
Jen-Hsun Huang, Nvidia CEO, told the Reuters Global Technology Summit in San Francisco on Tuesday, 18 June 2013, that licensing graphics cores and visual patents would help Nvidia take advantage of the booming market for smartphones and tablet PCs, and tap markets it could not reach through selling its own chips.
“The bottom line is the world has changed and we’re expanding our business model to serve markets that we historically could not serve by selling chips alone,” Huang said.
Nvidia is likely doing this because its Tegra partner program isn’t going as well as it hoped. The Tegra program initially started out with Nvidia subsidising and licensing out Tegra 3 chip designs and Nvidia’s engineering assistance to device manufacturers that wanted to deliver a solid tablet for $200.
Google and ASUS took advantage of that and created the Nexus 7 – a $200 device that included a quad-core Tegra 3 processor and ran Android Jelly Bean. Acer was the only other brand known to have a device in the works that benefited from the program, but we haven’t heard of any similar devices for a while.
Then Shield hit the news. Nvidia Shield is a $349 gaming device that can play a host of games available on the Google Play store as well as the Nvidia Tegra Zone. It runs Android Jelly Bean and is effectively offering the same package as the Nintendo Wii U and the Sony PS Vita by allowing game streaming from an external device over local Wi-Fi, but that device is now your computer. In addition, Geforce Grid can stream games to you over the Internet in the near future.
Moving to a licensing model in the same vein as ARM means that more manufacturers will be able to take the building blocks of Tegra 4 and create their own devices. The more Tegra devices out there, the bigger Nvidia’s reach using Geforce Grid. Its a risky play, but one that Nvidia is striding ahead with confidently as they turned down involvement in the next-gen consoles from Microsoft and Sony, saying it would not be financially beneficial.
Whether the tactic pays off remains to be seen, but it looks like Nvidia is making sure all its eggs aren’t in the same basket. As the importance of the desktop diminishes for average Joe and the focus shifts ever more into mobile, Nvidia will be fighting on a new battlefront that includes Apple, Samsung, Qualcomm, Texas Instruments, and AMD. For gamers, a tablet or mobile device with Tegra hardware may be the better buy in future.
Source: Xbit Labs, MyBroadband
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