NVIDIA Corporation (NVDA): Can This Chipmaker Win the Smartphone Race!

Potential Threat from Intel’s New Processors

In addition to Qualcomm, NVIDIA also faces competition from relatively new entrant Intel Corporation (NASDAQ:INTC). Intel released its very first ultra-low power Atom system-on-chip products for smartphones and tablets. Intel’s Clover Trail+ is the evolution of Medfield processors for high-end Android phones. The company said that it would feature two cores and support hyperthreading. This will result in a doubling of processor power when it launches later this year.

Intel’s Lexington, its new generation of Atom processors, is aimed at emerging markets. Acer, Safaricom and Lava have all signed on to build using the new platform. The company recently announced the release of Bay Trail, the next-generation Atom aimed exclusively at tablets. Set to launch during the 2013 holiday season, the 22-nm, quad-core processors are targeting both Windows 8 and Android software platforms.

Tegra 4 Processors could Outperform Competitors

Apart from Qualcomm and Intel, NVIDIA also faces competition from leading handset manufacturers — Apple Inc. (NASDAQ:AAPL) and Samsung — who design their own chips in-house and could end up selling them to other device manufacturers in the future. But NVIDIA’s emphasis on 4G LTE with Tegra could have an edge over nearest competitors.

For the high-end smartphones supporting LTE, Qualcomm’s Snapdragon dual-core processors helped the company capturing a significant chunk in market share. For example, Samsung’s Galaxy S III and HTC’s One X series had to be launched in the U.S. with a Snapdragon core, since rival chipsets did not play well with Qualcomm’s LTE basebands.

But NVIDIA’s upcoming Tegra LTE chipset integrated into Tegra processors could pose serious threat for Qualcomm. Additionally, the upgraded Tegra processors could help NVIDIA score additional design wins, as manufacturers continue to roll out new tablets designs in the coming year.

The Bottom Line

With the launch of Tegra 4 line of processors, NVIDIA has made it clear that the company wants to become a leading player in the mobile processor race. While NVIDIA’s stock price isn’t expected to witness any spike in the near-term, in the long-term the stock will undoubtedly trade in a higher trajectory.

The article Can This Chipmaker Win the Smartphone Race! originally appeared on Fool.com and is written by Anindya Batabyal.

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