Four years after announcing its intentions to "engage the smartphone revolution," chipmaker Nvidia said it plans to wind down and possibly sell its LTE modem operations. The company acquired the LTE modem-maker Icera in 2011.
Nvidia said it will wind down its Icera business beginning in the second quarter of fiscal year 2016 to focus on other "high-growth opportunities." Those include gaming, automotive and cloud computing applications such as deep learning where Nvidia's "visual computing expertise is greatly valued," according to the company.
The company's attempts to establish a foothold in the LTE hardware market haven't turned out as initially planned, especially in light of Qualcomm's market dominance. According to a December 2014 report from Strategy Analytics, Qualcomm "has a significant edge in terms of product roadmap and design-wins," although its share of the LTE market has dropped from 95 percent to less than 80 percent.
When Nvidia rolled out its i500 LTE modem and Tegra 4i processor -- both of which were integrated with Icera's technology -- in 2013, it billed those launches as "evidence of one of the fastest, most successful mergers the IT industry has ever seen." However, the company later announced it had no plans to produce a second generation of the 4i processor.
In January of this year, the investor site The Motley Fool pointed to Nvidia's silence at the Consumer Electronics Show regarding an i500 successor as a sign that the company was "done with cellular basebands."
The company's LTE business also didn't merit much mention when Nvidia announced its fourth quarter and 2015 financial results in February. Instead, the company pointed to record annual revenues of $4.68 billion driven by growth in the gaming market, technology for self-driving cars and computing for deep learning.
"Momentum is accelerating in each of our market-specialized platforms, driving record revenue in the quarter and full year," Nvidia President and CEO Jen-Hsun Huang said at the time. Those specialized technologies included GeForce and Shield in gaming, the Drive auto-computing platform for self-driving cars and the Tesla accelerated computing platform for deep learning applications, he said.
"The success of these platforms highlights the growing importance of visual computing and the opportunities ahead for Nvidia," Huang said.
Financial Details Coming
In announcing its plans to wind down its Icera business on Tuesday, Nvidia said it was open to a sale of the technology or operations. The company said although it will continue to use the Icera 4G LTE modem over the coming year or so, it eventually "expects to partner with third-party modem suppliers and will no longer develop its own."
Nvidia plans to release further details about its Icera decision when it announces its first-quarter 2015 financial results this Thursday. The Icera modem business currently employs about 500 people, with most of them located in the U.K. and France. Smaller operations are also based in Asia and the U.S.
Posted: 2015-05-06 @ 2:35pm PT
Point taken, Mr. Norris and the headline was updated. Thanks.
Posted: 2015-05-06 @ 12:50pm PT
I think the heading is misleading. They are not exiting the "mobile chip business". They are only exiting the modem business which they acquired from Icera. They will continue to make mobile chips that will target the gaming and automotive businesses