Nvidia Corporation (NVDA) & Qualcomm, Inc. (QCOM): The Mobile Gaming Revolution

Won’t go quietly

QUALCOMM, Inc. (NASDAQ:QCOM), the mobile chip leader, won’t go quietly in the mobile GPU battle. While Tegra 4 destroys all current-generation hardware when it comes to graphics QUALCOMM, Inc. (NASDAQ:QCOM)’s upcoming Snapdragon 800 is claimed by the company to offer even better graphics performance than the Tegra 4. This may very well be true, but Tegra 5 will be the real challenge for QUALCOMM, Inc. (NASDAQ:QCOM). With the Kepler core brought to mobile the performance gains should be stunning, as evidenced by a demo released by NVIDIA Corporation (NASDAQ:NVDA) recently:

The above demo switches between desktop Kepler and mobile Kepler, showing that the mobile version is extremely capable of providing near-desktop graphics performance.

QUALCOMM, Inc. (NASDAQ:QCOM) is likely to remain the overall leader, but I expect NVIDIA Corporation (NASDAQ:NVDA) to carve out a piece of the high-end market by focusing on outstanding graphics. This will certainly hurt QUALCOMM, Inc. (NASDAQ:QCOM)’s margins, as the high-end is the most lucrative. Given that NVIDIA’s sole focus is graphics and the company has two decades of experience I believe that the NVIDIA has a real advantage pushing mobile graphics forward.

The bottom line

This year is a transition year for NVIDIA Corporation (NASDAQ:NVDA) when it comes to mobile, with Tegra 4 starting to show up in devices after the delay. With the expected release of Tegra 5 next year NVIDIA will boost the graphics capabilities of mobile devices well above where they are today, and NVIDIA has a real shot at becoming the leader in mobile GPUs much like it became the leader in PC GPUs. The key is games, and as more Tegra-optimized games are released NVIDIA’s chances of success grows. There’s certainly still a hard road ahead for the company as it attempts to pry market share away from QUALCOMM, Inc. (NASDAQ:QCOM), but NVIDIA is in prime position to bring about a mobile gaming revolution.

Timothy Green owns shares of NVIDIA. The Motley Fool recommends NVIDIA Corporation (NASDAQ:NVDA). The Motley Fool owns shares of QUALCOMM, Inc. (NASDAQ:QCOM).

Timothy is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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