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Tegra 3 may not sell as well as expected, analysts say

The lack of demand for non-Apple tablets may be large enough to hold back sales forecasts of Nvidia's upcoming Tegra 3

Some analysts are having more reserved forecasts for Nvidia’s upcoming quad-core mobile platform.

As reported on Barron’s, analyst Uche Orji of UBS has lowered his revenue estimates for Nvidia for the second half of this year. Specifically, he reduced his previous overall Nvidia GPU Q3 2011 estimates from $572 million to $543 million and from $178 million to $136 million for the “consumer products business.”

A second analyst, Rajvindra Gill of Needham & Co., is also not expecting very much from Tegra 3 once it launches. He sees his previous Q4 2011 revenue estimate of $117 million for the quad-core chipset too farfetched and has revised it to be anywhere from $40 million to $80 million lower.

The reason for the large revision, Gill claims, is that there are currently too many tablets not selling and sitting on store shelves. The source believes there could be anywhere from “2 million to 4 million units of excess non-Apple tablets that are being cleared from inventory” and that such an event could very well occur again once more Tegra 3 devices become available.

The Asus Transformer Prime is still slated to be the first consumer tablet with the new Nvidia chipset. Fortunately for both Nvidia and Asus, the first Transformer tablet sold reasonably well, so there is a chance that the Prime can have long legs well into 2012. Competition in the mobile CPU market will only grow more intense, however, as Qualcomm is expected to launch its quad-core Snapdragon series by early next year.

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Allen Ngo, 2011-11- 6 (Update: 2012-05-26)