Nvidia’s Tegra K1 Powers Google’s Project Tango Tablet Kit

by Trefis Team
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Earlier this week, Google (NASDAQ:GOOG) unveiled its Project Tango tablet development kit, powered by Nvidia’s (NASDAQ:NVDA) Tegra K1 processor. Announced in February this year, Project Tango is a smartphone and tablet project by Google. It was initially launched with only a smartphone prototype, which was powered by Qualcomm’s (NASDAQ:QCOM) Snapdragon 800 processor. While the Tango smartphone was sold to just 200 developers in March 2014, the tablet version is expected to exist in larger quantities. [1]

The Project Tango 7-inch tablet features a software kit that will give developers tools to build applications with 3D mapping and sensing capabilities, which can be a boon for the disabled. Visually impaired people could use Project Tango to navigate unfamiliar places, with the software describing things in the room as the user walks around. The technology could also help create next-gen gaming experiences. [2] The tablet can also create large scale virtual and augmented reality experiences, allowing real estate companies to build interactive, 360-degree tours. Priced at around $1,000, the Project Tango kit will be available to developers later this year.

Tegra K1 Uses The World’s Fastest & Most Energy-Efficient GPU Architecture

Introduced at the 2014 Consumer Electronics Show (CES), Tegra K1 mobile processor is a 192-core super chip that brings the Kepler architecture, which is the world’s fastest and most energy-efficient GPU architecture, to the mobile platform. Nvidia claims that using the Kepler GPU enables the new mobile processor to be 1.5 times more efficient than other mobile GPUs and offer better graphics than the Xbox 360 and PlayStation 3.

Tegra K1 offers real-time computing, global illumination, higher dynamic range and greater detail, including reflective surfaces, dripping water and other realistic physically-based rendering. Nvidia expects the performance and feature gap difference between mobile and PC high-end gaming to blur in the future.

Mobile Devices Is The Largest Tegra Sub-Segment For Nvidia

Nvidia derives 10% of its valuation from the Tegra division, as per our estimate. We believe that Tegra processors revenue will cross $1 billion over our review period. There are three key growth drivers for Nvidia’s Tegra business—mobile devices, automotive applications and gaming—with the mobile device segment being the largest. (Read: Mobile Device, Automotive & Gaming Are Key Growth Drivers For Nvidia’s Tegra Business)

Leveraging its Tegra processors to tap growth in mobile computing is a key long term growth strategy for Nvidia. In order to better compete against Qualcomm (NASDAQ:QCOM), Nvidia pulled up the production of its Tegra 4i chips, its first fully integrated 4G LTE mobile processor, at the expense of its short term revenue growth last year. Since the mobile device market is highly competitive, Nvidia is just narrowly focused on devices where it believes it makes a real contribution, devices where performance and differentiation matters. The company expects to see continuous growth in this segment for the rest of the year.

In May 2014, China’s leading mobile manufacturer Xiaomi, introduced its first tablet (MiPad) based on the Tegra K1 mobile processor. Increasing acceptance of Tegra K1 processor in new devices will accelerate Nvidia’s Tegra revenue growth in the future.

Our price estimate of $18.43 for Nvidia is almost in line with the current price estimate.

See our complete analysis for Nvidia

  1. Google reveals Project Tango tablet: Nvidia K1 with 4GB RAM, 128 GB storage, Android Authority, June 5, 2014 []
  2. Google struts out Project Tango tablet for developers, CNET, June 5, 2014 []
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