Monday, 9 May 2011

NVIDIA makes key move into wireless with Icera

NVIDIA is to add baseband and RF capability to its Tegra processors by acquiring reconfigurable technology developer Icera.
‪“This is a key step in NVIDIA’s plans to be a major player in the mobile computing revolution,” said Jen-Hsun Huang, President and CEO of NVIDIA. “Adding Icera’s technology to Tegra gives us an outstanding platform to support the industry’s best phones and tablets."
Icera has more than 550 patents granted or pending worldwide, and its high speed wireless-modem products have been approved by more than 50 carriers across the globe. The $367m acquisition allows NVIDIA to offer the two main processors used in smartphones (the application processor and baseband processor) to help OEM customers both improve their time to market and deliver the requirements of next-generation mobile computing. NVIDIA will also have approximately doubled its revenue opportunity within each device.
Icera is a perfect fit for NVIDIA. Our businesses are complementary. Icera has the right team, with a strong, proven track record. And their nimble, entrepreneurial, engineering-focused culture mirrors our own,” said Huang.
At the same time Huang added that NVIDIA intends to continue to collaborate with its existing baseband partners and respect its customers’ preferences in combining application and baseband processors.
“NVIDIA’s Tegra processor has the most impressive roadmap in the industry, and it is an ideal match for Icera," said Stan Boland, President and CEO of Icera. "As part of NVIDIA, we will be able to reach a broader market. Our team has collaborated closely with NVIDIA for several years on a range of projects, and we’re delighted to be joining forces.”
"2011 is proving to be a real turning point for NVIDIA and the company has already made several important moves to give itself a fighting chance in the mobile computing market," said Sravan Kundojjala & Christopher Taylor, Analysts at Strategy Analytics. "Firstly, the company set a strong product roadmap for its Tegra products. Secondly, the company scored an important design-win with Microsoft to make its ARM-based processors compatible with Microsoft's next generation Windows platform. Finally, today, the company acquired Icera, a baseband company to fill a gaping hole in its mobile strategy."
"By our estimates, Icera had less than 1 percent unit shipment and revenue share in the cellular baseband market in 2010 but is one of the prominent players in the mobile broadband market, in particular the US market," they said. "Icera’s soft modem basebands gained good traction among European and North American wireless operators in 2010 and the company is one of only a few that has market-ready HSPA+ / LTE basebands. Icera supplies W-CDMA / HSPA / HSPA+ basebands for embedded and detachable mobile broadband modem devices. The company currently has no share in handsets but is on track to ship its first voice-supported baseband modem by Q4 2011.

Icera's acquisition still leaves some holes in NVIDIA's cellular strategy:
  • The two companies indicated that baseband-integration in Tegra processors is a long-term goal and could take time. We regard this situation as similar to Intel-Infineon’s and think it could take 3-4 years for both Intel and NVIDIA to field baseband-integrated apps processors. 
  • NVIDIA may have to acquire a few more companies to fill the connectivity gap in its product portfolio and to position itself as a complete platform player like Qualcomm, ST-Ericsson and Broadcom. Neither NVIDIA nor Icera offer any connectivity solutions such as Bluetooth, Wi-Fi, GPS, FM radio, NFC or ZigBee.
  • We think it's critical for NVIDIA to address every single price point to gain volume to match Qualcomm. Qualcomm currently has the broadest portfolio of processors to address various price points. In the near-to-medium term, we don't expect any impact on Qualcomm’s market share from this acquisition. However, given Icera's strong modem capabilities, the NVIDIA-Icera combination could be a potential long-term threat to Qualcomm.


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Posted by Nick Flaherty

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