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Tuesday, June 19, 2012

iPad hedge... NVDA

Worried that the new entrants into the tablet space will truly dent the iPad? Look at NVDA as a hedge. They seem to be the key beneficiary with their Tegra chips.  This chip has been out for a few months, and frankly lagging Apple's A series chips by 8-9months from development, and longer from a commercial perspective.

In Oct 2011, I wrote a post about when to begin to question Apple's competitiveness.  One of the items was Apple's chip capability, as the chip differentiates Apple's products. From a hardware perspective, Apple products are, for the most part, superior.

As new tablets enter the space they are using chips at (arguably) par to the current Apple offering. However, supposedly 'real' iPad competition will not be available until later this year. And if those other tablets are not priced competitively, forget it, there is no competition. (Even Kindle Fire sales dropped off due to the iPad 2 price change.)

Basically, the competition is lagging, which means its not really competition.  But if anyone wants to protect, or benefit from the new competition, NVDA looks interesting here.  The Surface announcement has allowed NVDA to break out from its negative trend.

I may look to play NVDA on weakness because there will be a market for tablets that are not iPads, even though I feel MSFT is doing its best to botch up a fine product with the confusion it inspires.

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