Tegra quarterly revenues decline
For fiscal 2015, revenues for the Nvidia (NVDA) Tegra totaled $579 million as compared to $398 million for fiscal 2014, showing an increase of 45% on a yearly basis. However, Tegra sales fell quite substantially in 4Q15 after having shown good growth during previous quarters. For 4Q15, Tegra revenues stood at $112 million as compared to $168 million for 3Q15.
Smartphone and tablet design wins featuring Nvidia Tegra drove the revenue decrease, but automotive infotainment sales more than doubled, cooling off the decline. This might be one of the chief reasons why Nvidia focused solely on the Tegra X1 at the 2015 International CES (or Consumer Electronics Show), a very strong market for the company’s processors.
As the chart above shows, the new Tegra X1 system on a chip has a GPU (or graphics processing unit) based on Maxwell architecture, which is Nvidia’s most advanced PC architecture.
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Tegra targets automotive and gaming spaces
Nvidia CEO Jen-Hsun Huang stated that the company’s strategy for Tegra is to “focus on automotive and gaming.” He also said that the majority of Tegra processors involve automotive technology and the gaming platform Google (GOOGL) Android Shield.
Tegra is all set to gain traction
Although Tegra processor revenues dropped in 4Q15, Nvidia expects Tegra to post record revenues once again through Shield tablets, embedded systems, mobile devices, and auto infotainment systems. Nvidia plans to use Tegra to support Honda (HMC) Connect in delivering a unique touchscreen experience with extreme graphics.
The automotive partner portfolio of Nvidia already includes Volkswagen, Tesla Motors (TSLA), Lamborghini, BMW (BMW), and Audi. Nvidia is keen to focus its leverage and traction of Tegra in the automobile industry to counter rising competition in the chip space.