Xiaomi has scheduled an April 23 press release, right on the same day OnePlus will have theirs, and naturally Xiaomi won't be outdone. If these rumored specs for Xiaomi tablet expected to appear that day are anywhere near reality, then Xiaomi probably doesn't have much to worry about.
The Chinese company, whose affordable but capable smartphones are notorious for selling thousands in just minutes, has long been expected to out a tablet as its next big product. This expectation was lately reinforced by the company releasing its MIUI custom Android interface for the Nexus 7, and then with the teasing of a new device slated for unveiling in two days. Adding even more fodder, we are being given a glimpse of what seems to be the back covers for rumored tablets. They aren't exactly remarkable and actually bear some resemblance to Apple's tablet design.
xiaomi-tablet-cover-1 xiaomi-tablet-cover-2 xiaomi-tablet-cover-3
There are specs going around the Internet as well, and it sounds like a wishlist more than anything else. The display is said to be an 8-inch retina screen manufactured by Sharp and boasting of a resolution of 2048x1536. The rumored processor on this tablet is no less ambitious, being the rather recent NVIDIA Tegra K1 that itself boasts of a 192-core Kepler GPU. It isn't mentioned whether the processor will be the 32-bit CPU officially unveiled by NVIDIA, or the 64-bit variant spotted in AnTuTu.
These specs do look tasty, but Xiaomi is not exactly known for pulling out all the stops when it comes to hardware, preferring to focus instead on the balance between performance and price. However, considering it would be the manufacturer's first tablet, it is also possible that it would try to put out the very best, perhaps with a price tag to match.
VIA: Weibo (1), (2)
Sentiment: Strong Buy
Danny Shapiro, director of automotive, Nvidia Corp.
The Connected Car
April 21, 2014 - 12:01 am ET
The redesigned Audi TT, scheduled to arrive in the United States in 2015, benefits from chipmaker Nvidia's quad-core chip, which works with a 3-D graphics program and can execute 8 billion operations per second.
Danny Shapiro, director of Nvidia's automotive division, has worked closely with Audi and other automakers since 2009. He spoke with Automotive News Europe Correspondent Andrea Fiorello about what's next for the Santa Clara., Calif., company.
Q: The new Audi TT has a large thin-film transistor monitor that delivers a sophisticated combination of gauges, navigation and infotainment data with 3-D graphics. How has all this been achieved?
A: The TT's monitor is powered by two Nvidia Tegra K1 mobile processors. This new chip is built on the same graphics architecture as that used in the world's most extreme gaming PCs and the fastest supercomputer in the United States. It also achieves substantial reductions in heat dissipation and weight. The result is a microprocessor that brings console-class gaming graphics and performance to mobile devices.
The TT actually has two autonomous processors working together, running a variety of applications at the same time and presenting the information on the same screen. As well as infotainment and navigation, they can be connected to cameras, laser scanners and radar to detect pedestrians and blind-spot objects and to read speed limit signs.
Which automakers are you supplying?
We started with high-end Audis, Lamborghinis, BMWs and Rolls-Royces, and at the moment, there are a little more than 4.5 million cars on the road fitted with Nvidia processors. Now, we're moving into more entry-level vehicles, and there will be announcements later this year of links with some mainstream Japanese manufacturers. Based on our contract signings for future developments, we expect to see our processors installed in a further 25 million vehicles over the next few years.
Carmakers say the autonomous car will be ready by 2020. Is this something you are working on with Google, and how is this progressing?
While we're not allowed to detail our cooperation with Google, I can say that the hardware already exists, and now it's all about creating the software. Sensing is easy, the difficult part is the decision-making process, the equivalent of what goes on in our brains when we drive. That requires even more computing power and algorithms that understand the external world. This task is made much easier by vehicle-to-vehicle communication, and we need to invest in developing this.
Contact Automotive News
Sentiment: Strong Buy
As you probably know, NVIDIA recently promoting its mobile chips by setting up model (reference) platforms on which Tablet PC manufacturers can produce their own models.
NVIDIA Tegra K1. Reference tablet with 4 GB of RAM and a Full HD screen
Poimer: Tegra Note 7, which is a low-cost tablet, which you can buy at a price of 199 made of quad-core Tegra 4 and has the support of the active digital pen. However, it does have one flaw: resolution screen (1280 x 800 pixels) corresponds to the thumb, the standard by which the sample vypuskalis′planšety 19th, 2012 year. But, with the advent of new čipaTegra K1, the situation must change for the better.
As you know, the new processor has a huge computing power in graphics and according to the latest information, NVIDIA has been working on the new Tablet platform model, made on its basis.
Tablet, in addition to a new mobile processor NVIDIA Tegra K1 can boast seven inch screen with resolution of 1920 x 1200 pixels and unprecedented device of this type have had 4 GB of RAM.
Sounds very exciting, isn't it? Personally, I would not refuse to make a Tablet, equipped with a chip embedded with a 192-core GPU, 4 GB of RAM and a high resolution screen.
Sentiment: Strong Buy
Santa Clara, California – Nvidia, a giant in the graphics department for computers, made sure that it still remains to be one of the top. This was clearly shown with the trailer of a new game entitled Watch Dogs.
Nvidia Shows How Dominating It Is With the Watch Dogs Trailer
The richness of the color spectrum is very visible in the trailer. Other game makers even testified that the hardware provided by the company is a very essential tool to keep their games more entertaining and more exciting.
The Special Bond Between PC Games and Nvidia
It is very clear that the way Nvidia does its graphics is among the most favorable. The complexity of creating a game takes so many resources from a company. Every goal of a game maker is easily settled when the graphics are so good.
With this graphics hardware company, that comes so easy. Not just that they are visually entertaining, the graphics are also realistic. This is very important now that games have become so dependent on animation. You will never see one maker that sleeps on this department.
Everything from Nvidia is stunning, as mentioned by Ubisoft. Also, they have features that no other company can provide. They have made serious changes to make the game thrilling and more exciting.
The Adjustments That You Have Never Seen Before
Ubisoft, the creators of Watch Dogs, has made sure that they get nothing but the best from the company. One of which is Nvidia’s HBAO Plus Light. This is the main reason why everything seems so real. It produces something that can enhance the shadow of the characters and all the other materials in the game. It processes where the sun comes in and comes out to give it a more natural look.
Another great feature is the Nvidia’s TXAA anti-alias technology. This is one of exclusive that Nvidia has given to the game. This improves the graphics drastically. Even the littlest details on a shirt, on a face, on a building, and all parts of the video game are going to receive the best attention because of it. This means that they will not be cutting corners in the entire production.
Watch Dogs will be released on May 27 already. This will run the latest technology from Nvidia. It will be available not just on PC but on other consoles. Aside from the greatly enhanced graphics, it will also feature a greatly done gameplay. Are you excited?
Sentiment: Strong Buy
Yesterday at PAX East an extremely interesting livestreamed panel titled “The (Incredible) Future of PC Gaming” was held, discussing what we can expect from games on PC in the next few years. The speakers were Oculus VR founder Palmer Luckey, Planetside 2 Creative Director Matt Higby, Star Citizen Creative Director Chris Roberts, Nvidia Director of Technical marketing Tom Petersen and PC Gamer Editor in Chief Evan Lahti as a moderator.
The panel started on a light note with the whole audience standing for the “PC Gaming national anthem” and with a rather fitting and much more serious “mission statement:”
PC Gaming is open, it’s high powered, it’s flexible, moddable, malleable, it’s not “one size fits all,” it’s gaming greatest breeding ground for experimentation and original ideas. There’s no platform that offers the same amount of choice, value, variety and performance as PC gaming.
Petersen started the dances mentioning that according to him PC gaming is going to be much more cloud oriented in the future, with the ability to stream games anywhere from your PC, and not just sitting on your basement, unless that’s what you want. He sees the future as the ability to get a great PC gaming experience anywhere, on any device. Luckey responded (causing quite a bit of hilarity) that it was a pretty optimistic vision.
Petersen clarified that since the mobile experience is in demand nowadays, Nvidia is going to drive the ability to bring PC gaming on any device, with the same games, and even the same saves.
Roberts sided with Luckey, explaining that the reason why he likes PC gaming is that he wants to have the best experience possible, and the ever changing hardware actually helps him do things he couldn’t do before, without waiting six or seven year-long cycles of a console.
He actually wants to be in his basement or in his office with the most powerful machine possible, having the best immersion, so he’s always quite skeptical of cloud experiences with their latency issues, and especially about remote cloud rendering for gaming.
He continied by mentioning the beauty of playing Star Citizen in 4K resolution if you have the machine capable of running it, but he simply can’t achieve the same resoults on a mobile device or with streaming.
Speaking of 4K resolution Petersen said that the price of compatible monitors is coming down, so playing at that resolution is becoming accessible and doing so with multiple monitors is not far beyond. He also took the chance to pitch G-sync, which is Nvidia’s technology that forces the monitor to refresh frames following the frame rate rendered by the video card instead of the traditional opposite.
Higby moved on to say that hardware inconsistency is one of the biggest challenges for PC developers, and the level of customization available forces developers to put a “crazy” amount of options in the games to take advantage of the different hardware, but that’s also what makes them love PC gaming, alongside the enthusiast mentality around it.
Roberts continued by saying that Microsoft has been a sort of “gater” on performance on PC, so he’s happy about the movement with Mantle and now DirectX 12, that allow you to actually make full use the hardware you have, since it’s very frustrating to have a really powerful PC and not use it fully like you do on a console, because the operating system gates resources away.
On the other hand now you can get closer to the hardware, and that will bring a fair amount of improvement. Ultimately PC gaming has always been big and has always been around, so he doesn’t get those that say that PC gaming is not a “platform.” As far as he’s concerned PC has always been a platform, and the biggest platform at that. It just hasn’t taken the same headlines. World of Warcraft has probably made more money than any other game in the history of gaming, including all the big console franchises.
Higby also mentioned that piracy has been dropping due to games moving online and on new business platforms, enabling developers to actually run a company off of making PC games. Roberts agreed, also mentioning the shift to digital distribution as a positive aspect for developers as it cuts out the middleman and reduces piracy.
Petersen actually had numbers to back it up, saying that Nvidia estimated around 24 billion dollars of yearly revenue for PC games, including sales, digital downloads, microtransactions and subscriptions.
Luckey moved on to explaining that a problem in the last few years was that developers focused too much on visual fidelity and too little in reducing latency, and that’s not as simple as running at sixty frames per second. According to him 60 fps is not some sort of magical benchmark to establish if a game is done right, and there are many games that run at that framer ate but have many layers of buffering and “all kinds of crazy #$%$” going on that create hundreds of milliseconds of latency. He doesn’t even know how those games are playable.
Petersen went back on Microsoft, explaining that as long standing partners Nvidia has seen that Microsoft is putting a lot of resources into making PC gaming great, but there are still things that need to be worked on, and that’s what DirectX 12 is trying to improve. Yet there’s “way more” to do beyond DX12, like latency improvements and experience improvements. There are a lot of small changes in the internal infrastructure of Windows that can improve the pace of the frame delivery and not just the quality of each single frame, and that’s being worked on.
Chris Roberts interjected mentioning that Star Citizen is going to support Linux, and all the servers run on Linux too, so it’s a natural transition, but he still thinks that Windows is going to be the dominant OS, and the big challenge is to design games to properly utilize multiple cores, and that’s also an advantage coming with Mantle and DX12. That’s why he doesn’t mind “rubblerousing” a bit with Microsoft to convince them that there isn’t just Xbox, as he feels that they got a lot more money from PC gaming over the years. That’s why they should make sure that people want to be on Windows and don’t go on other platforms.
Roberts also explained that while big projections for companies like Dell show a decline in the sales of PC, that doesn’t affect PC gaming, as most PC gamers build their own PC, and that’s why they don’t buy from those companies anymore. Statistics based on those manufacturers are skewed, and the big business based on gamers is in selling components like motherboards and video cards.
Petersen confirmed, mentioning that Nvidia pays attention to those stats, and while the overall PC business is flat or declining, the gaming sector is growing strongly. From their perspective PCs aren’t declining at all, but they’re growing stronger. Their sales for the GTX sengment has never been stronger, and that’s because the content is more compelling then ever.
Higby also mentioned that he’s surprised that seeing the birth of an open source operating system made just for gaming (SteamOS) has taken so long.
Petersen continued by explaining that Nvidia sees PC gaming as a platform, and there are now 26 million users that use GeForce Experience to automatically configure the settings of their games to the optimal values. Yet he’d find very cool to have a Windows version stripped down of all the non-gaming features, leaving you with a much thinner and more predictable OS.
Talking about SteamOS Higby mentioned that PCs could have a place in the living room, but there are still going to be a lot of people that just prefer sitting at their desk. SteamOS is going to expand the potential for what kinds of PC games can take off, as it’ll offer a different gaming experience, but in general that’s just a continuation of the expansion of what PC gaming is.
Luckey is also very enthusiastic about SteamOS, and he uses it on his own rig. While it’d be very cool to have a stripped down Windows version for gaming, that’s what SteamOS already does.
During the Q&A session at the end of the panel, a few more interesting concepts were expressed:
Chris Roberts feels that the future of PC gaming is 64 bit. Star Citizen is going to be 64 bits exclusively, and the legacy of 32 bits is holding developers back.
Higby mentioned that a solid state drive is the best cheap upgrade you can do to your PC, and a “great great great” thing for gaming. Petersen and Roberts confirmed that idea. Petersen also mentioned that, while a SSD doesn’t directly affect framerate, it does greatly reduce stutters as levels and textures are loaded.
Higby sees E-sports as a driver to help developers make their games more competitive and competitive in different kinds of ways.
Petersen explained that AI is about to go through a massive improvement as GPUs start to be used to do real machine learning, and in a few years we could play against AIs that we actually trained, and are different from everybody else’s AIs.
Planetside 2 won’t support Linux. The problem with moving more games to Linux is the rendering pipeline, as it requires developer to move to OpenGL and that isn’t trivial. It’ll become much easier when all the major engines will support Linux like CryEngine does.
Petersen explaind that the problem with cloud gaming isn’t downstream bandwidth, because that’s normally sufficient, but upstream, as it affects input and is unique compared to movie streaming. There’s no easy solution, but there are some big things that are easy to fix and he feels that we’ll be surprised with the quality of game streaming available even today. He also mentioned that at the moment they can already do long distance streaming with about 100 milliseconds of latency, which is less than a PS4 or an Xbox.
Luckey expressed a concern about the cloud streaming games, because there are a lot of kinds of games that are way too twitchy to work on the cloud, like Quake for instance, and if cloud gaming becomes mainstream, would those kind of games be able to get investors or to be greenlighted by publishers? He hopes that virtual reality can actually push the trend the other way, as he’s a big believer in big horsepower located in your house, not somewhere else. He likes to own his hardware and software. Ultimately he’s more of a fan of using the cloud for AI and physics computation instead.
Roberts mentioned that publishers definitely want to have games as a service, but he doesn’t see them wanting to get into the hardware ownershiop business than a mass movement to cloud gaming would require. Luckey added that some may be interested because it’s the ultimate form of DRM.
Sentiment: Strong Buy
Nvidia's Petersen mentioned that the price point for 4K—both from a perspective of display and rendering hardware, continues to drop. This is obviously a good thing for Nvidia, since it's in the business of selling video cards.
Enlarge / The panel, with Higby's face partially obscured by a monitor.
When asked about the biggest challenge to developing on PC, the panel turned to PlanetSide 2 creative director Matt Higby. Higby pointed out that the PC's greatest obstacle is also its greatest strength: an infinite variety of configurations in hardware and software exist, and you have to build things for all (or at least most) of them. The issue is compounded because the people most likely to spend money on cutting-edge games are the same enthusiasts with the crazy home-built rigs.
Robert expanded on Higby's point: the PC has always been the biggest and best platform for developers and for gamers—it just hasn't always grabbed the biggest headlines. The "PC as a platform"—a phrase echoed by Petersen—is an absolutely massive market, but it's not always realized as such because it's fragmented between different OEMs and home-built rigs without a singular marketing effort.
Higby also spoke extremely candidly about game piracy, saying things I've heard echoed on forums before but never out of the mouth of a developer. Piracy, he said, is an availability and distribution problem. The more games are crowdfunded and digitally delivered and the less a "store" figures into buying games, the less of a problem piracy becomes. Roberts was quick to agree, and he noted that the shift to digital distribution also helps the developers make more money—they ostensibly don't have everyone along the way from retailers to publishers to distributors taking their cut from the sale.
Oculus' Palmer Lucky agreed that piracy is a problem that can be solved not through more restrictions, but through fewer—the way to kill piracy is to make it more convenient to simply download a game legitimately than to go through the rigamarole of pirating it. Higby chimed in to agree—it's more annoying to download a pirated version of a game than to download via a trusted digital delivery service.
Petersen said that the total yearly industry-wide revenue for PC games (not video games in general, but PC games specifically) is $24 billion—a number that includes initial sales, in-game transactions, free-to-play microtransactions, digital downloads, and everything else. That's a huge amount of revenue to chase, and the panel members all agreed that the money will go to the developers and publishers and makers who produce what PC gamers want, as long as they let players buy games however they want to buy them.
The platform’s the thing
When the panel moderator asked the group if Microsoft would own the future of PC gaming, the responses were mixed. "Yeah, don't you remember Games for Windows Live?" joked Luckey, referring to Microsoft's horribly broken (and rumored to be dying) social platform. The comment was clearly in jest, though; Petersen spoke up and said that he thinks it's very clear Microsoft cares about PC gaming: "They have huge amounts of resources dedicated to making PC gaming great—that's what DX12 is for," he said.
Roberts said that the biggest issue with working on a grand-scale game on the PC is programming for the parallelization allowed by multiple cores. He gave big props to the multithreading support that Microsoft has added to DX12, which takes some of that burden off of the developers. Still, he said that it's a fight to make Microsoft realize that it's not all about the Xbox—that Microsoft is actually getting much more revenue out of PC gaming as a whole than it is out of consoles.
Roberts said that Microsoft should embrace not just the closed ecosystem model, but the PC gaming community in general. Top on the list of fears he said needed to be assuaged was that gamers won't be forced into using Microsoft's app store if they don't want to. "Consumers might try to abandon Microsoft for Linux because they're afraid of being pushed to the MS app store," he said.
Speaking of Linux: Roberts reaffirmed that while Windows is the main targeted platform for Star Citizen, the game maker will also be officially supporting Linux.
Enlarge / About half of the crowd that had come to listen to the panel.
Oculus' Luckey was then asked what remained to lock down virtual reality (VR) and make it the wonderful, immersive, seamless experience we've been promised since the 1990s. Luckey said that a lot of the development to make game frame rates higher hasn't necessarily made them faster—it's not just the quality of each frame, but the pace and regularity with which a frame is delivered. Some games with 60+ frames per second might still have more than a hundred milliseconds of latency for that frame's display due to the internal buffers in an application, programming quirks, or Windows-specific issues. VR has its own set of hardware-related latency, too. Killing latency is the key to immersive VR.
For what it's worth, Nvidia is on board with Luckey's and Oculus' quest to make VR better: Petersen took the opportunity to give a quick shout-out to Nvidia's G-sync technology, which is aimed at (among other things) reducing latency in frame displays.
Go do that voodoo that you do so well
But no panel could be complete without the closing question, which the panelists answered with aplomb. Aside from the technology that they specifically are working on, what other amazing thing do they want to see developed in the near term?
Nvidia's Petersen deadpanned, "I would like a virtual reality headset." Oculus' Luckey replied, equally deadpan, "I would like a more powerful GPU."
Sentiment: Strong Buy
BOSTON, MA—A four-person panel consisting of industry figures Palmer Lucky, founder of Oculus VR; Matt Higby, creative director of PlanetSide 2; Chris Roberts, grandfather of space combat simulations and Star Citizen creator; and Tom Petersen, director of technical marketing for Nvidia, faced down a packed room this afternoon at Boston's PAX East conference to answer questions about the PC as a platform—where it's been, where it's going, and why it's still not just a big deal, but possibly the biggest deal of all.
The panel delved into a number of specific points for the crowded room, but the key idea—and one that they kept reiterating throughout most of the questions asked—is that PC gaming has always been a huge market presence. Even as major computer OEMs produce numbers showing falling sales, the PC as a platform (and especially a gaming platform) actually shows strong aggregate growth.
It's hard to directly measure this kind of thing, but Nvidia's Tom Petersen pointed out that the company's sales of OEM and aftermarket video cards are strong and are getting stronger—especially its enthusiast-targeted GTX cards. The panel moderator (PC Gamer US Editor-in-Chief Evan Lahti) asked if cloud gaming might have something to do with the bolstering PC gaming numbers. Petersen agreed that could be the case (as expected from Nvidia, which has its own burgeoning cloud gaming rendering service). However, Chris Roberts had a different take.
Roberts has been making PC games since the 1980s, and in developing his latest title, Star Citizen, he's exploring all platform options. One thing that he says he's been dissatisfied with is anything involving remote video streaming—he says that latency is still an issue that hasn't been overcome, and he can't see it ever working well enough to be truly playable—not for a long time, anyway.
Roberts also spoke somewhat contentiously about the search for the "perfect platform" for Star Citizen. He said that after a lot of experimentati
Sentiment: Strong Buy
Nvidia will hold its sixth annual Emerging Companies Summit at its GPU Technology Conference in San Jose, Calif., in late March. And while the world’s biggest maker of standalone graphics chips often invests in companies working on cool graphics, this marks the first time that it will give away $100,000 in an on-stage bake-off among startups competing to be the best emerging company.
Jeff Herbst, vice president of business development, will lead the summit and be a judge in its Early Stage Challenge contest, where 12 companies will gather on stage to compete for the prize. Nvidia has had some successes with its investments lately — the biggest was Zynga’s $527 million purchase of NaturalMotion, a mobile game developer that Nvidia invested in early on.
Beyond the first-prize check of $100,000, more than $500,000 in total prizes will be given out.
We caught up with Herbst for an interview at the company’s headquarters in Santa Clara. He also told us what tech sectors are ripe for investment and the trends he is paying attention to among startups. Here’s an edited transcript of our interview.
Above: ECS 2013
Image Credit: Nvidia
VentureBeat: What’s new that you’re doing at the conference? How is this contest going to be different?
Jeff Herbst: This is our sixth year doing the Emerging Companies Summit here in San Jose. The new and exciting thing this year is what we’re calling our Early Stage Challenge.
What we realized is, (graphics processing unit) GPU computing and people building their businesses on top of a GPU is now, in my view, well beyond the tipping point. We’ve been at this for a long time. There’s now a lot of people who are actually trying to make money off of GPUs. Just look at what’s going on with Bitcoin mining. People have figured out that there’s a speed and money advantage to using these kinds of processors.
We’re going to go a little bit earlier-stage this year. We’re going to keep doing what we’ve done in the past, which is showcasing some of the mid-stage private companies who’ve raised decent amounts of funding from VCs or elsewhere, but we also decided we’d make a contest for companies that have raised less than $1 million of total capital. We put out an open invitation for those companies to apply, and we selected 12 of them to be part of the Early Stage Challenge contest.
We’ve asked Scott Budman, from NBC11, to moderate this. We have a panel of other experts, including Bill Reichert from Garage Ventures. Jens Horstmann from Crestlight. Pat Moorhead, from Moor Insights & Strategy. I’ll be up on the panel as well.
What we’re going to do is bring all 12 companies up in a two-hour window – about eight minutes per company – for part presentation and part Q&A from the panel. After we’re done, we’re going to vote on who we think is the company with the best prospects for commercial success, and award a $100,000 check on the spot.
The interesting thing about this is that the panel will get to vote, but the audience will get to put their input in as well. There’ll be a weighting factor between the panel of judges and the audience. The other key thing about this is, I’m not looking for research projects. The criteria are, it’s the best prospect for commercial success. If you want to see research projects, there are other parts of the GTC you can go to. We want to provide funding to the company that we think has the best chance of succeeding in the future. This is no strings attached cash. It’s not an investment. It’s just a cash infusion.
VB: And that differs in that some of the past ones were investments, right?
Herbst: We’ve never actually made investments as prizes for the Emerging Companies Summit. We do have what we call the One to Watch awards, which we’ll be giving out again this year, to five companies. Those awards are mainly a combination of in-kind services and prizes. It doesn’t encompass cash.
We also do invest in some of these companies on our own, but that’s not something we do as part of the conference. That’s what we call our GPU Ventures program.
VB: What do they share in common?
Herbst: All of the companies share in common the fact that they’re using GPUs in some way to build their business. It might be a game engine, or a big data or analytics engine. They might be doing computer vision. They might be doing cloud services of some kind.
That’s why I think what we do is pretty exciting. We’re not just throwing a big net out and saying, “Come join us.” We have a very specific theme that’s not only interesting, but often very cool, because what these companies do is very visual in many respects.
VB: In recent years, GPU computing was more of a focus than just pure visualization, right? Do you still have that emphasis, or do you consider some of this to be accomplished now?
Herbst: I’d say we’re seeing more and more companies doing GPU computing, but we continue to show a mix of companies at the conference. We have everything from big data, cloud, gaming, analytics, computer vision—I’d say those are some of the main categories. They span from mobile to desktop to cloud and combinations of them all.
I would say that if we’re seeing anything, we’re seeing – as a percentage of the mix – more companies doing GPU computing than we did five years ago. This is what I said at the beginning. We’re well beyond the tipping point, where people are using GPUs for all these kinds of applications.
The start of a match in CSR Racing.
Above: The start of a match in CSR Racing.
Image Credit: NaturalMotion
VB: What are some of the successes that you’ve already seen in this visualization area?
Herbst: We just had two recent ones I can tell you about. Both were companies that were alumni of the Emerging Companies Summit, and also companies that Nvidia was fortunate enough to invest in. The first one was NaturalMotion, which was just sold to Zynga for somewhere in the neighborhood of $500 million. That was the best exit we’ve ever had from our GPU Ventures program. They presented a couple of times with the Emerging Companies Summit.
The other one I can mention is Geomerics. They were doing a lighting engine. They were just bought by ARM in December, I believe. We were also an investor in that company. That was another good exit for us.
VB: What’s the most imaginative place where GPU computing is sprouting now? What would you consider that to be?
Herbst: I’m particularly excited about companies using GPU computing for enterprise applications. Big data is on my mind right now. We’ve got a couple of companies presenting this year that will knock your socks off. One of them is called Sqream. They’re going to be interesting for the audience. The other area is machine learning and robotics. This is another theme that we’re starting to see interesting
Sentiment: Strong Buy
Shares of NVIDIA Corporation (Nasdaq: NVDA) are poised for a dramatic run as the semiconductor market transitions from a PC-driven industry to one driven by hand-held device growth.
Over the next 12 months, I expect investors to realize gains as high as 245% as this company benefits from tremendous growth in demand for its products.
The stock has already begun to trade higher, but the recent gains are relatively small compared to the potential profits over the next several quarters.
Who Is NVIDIA, and Why Are Its Products Important?
It's understandable if you've never heard of NVIDIA Corporation before. But even if you haven't heard of this technology company, there is little doubt that you have enjoyed the company's work - either through a computer or cellphone that you own, or even through watching a movie or show that was made with NVIDIA's technology.
NVIDIA is the company that invented the GPU (Graphics Processing Unit) - a special form of semiconductor chip that aids and accelerates graphics functionality. The chips are used in products such as computers, mobile devices, tablets and basically any product that involves a screen.
Initially, NVIDIA's products became popular in the gaming industry, allowing video game consoles to offer much more realistic graphics generated in real time.
As the company's processors grew in popularity, developers in a broad assortment of industries began using NVIDIA's chips in the product design stage. NVIDIA boasts that its chips are used to design products ranging from "cars and planes" to "tennis shoes and shampoo bottles."
Most recently, the company's growth has come from two rapidly growing areas of the market:
1.Chips for mobile devices.
2.Chips for cloud computing.
As the market for high-powered cellphones and tablets continues to grow, and the demand for cloud-based solutions for everything from business to gaming increases, NVIDIA will continue to grow revenues and profits, leading to a tremendous ramp in the company's stock price.
Bullish Dynamics for the Semiconductor Market
The overall market for semiconductors is undergoing a major transition period.
On the negative side, the traditional market for PCs is maturing and chip sales for desktop and laptop computers are becoming much more of a commoditized business. This means that there is plenty of competition and profit margins are tight.
On the positive side, the global market for mobile devices such as smartphones and tablets is increasing dramatically. Research firm Gartner now believes that global shipments of smartphones will rise 33% this year to 932 million units. Shipments of tablets are expected to increase 32% this year to 221 million units.
With the technology market shifting dramatically toward mobile devices, the semiconductor companies who can adapt will wind up capturing significant market share. As with any economic transition, those that cannot adapt to a new set of dynamics will lose significant ground to competitors.
NVIDIA has been very successful in making sure that its products are a central part of this new wave of technology advancement. Here are a few stats relating to the company's leadership in the new generation of graphics development:
•70% of Android tablets run on the company's Tegra processors.
•90% of the world's cars are developed using NVIDIA's Quadro GPUs.
•More than 50 of the world's top 500 supercomputers run on NVIDIA's Telsa GPUs.
•NVIDIA's GFORCE chips are in 80% of computers sold throughout China.
As smartphones and tablets spread throughout the global economy (and as customers in developed countries continue to upgrade their phones and tablets), NVIDIA should experience significant growth.
A Legacy of Profitability and Growth
NVIDIA has a history of strong fundamental growth. Over the past three years, the company has grown revenue by an average of 20% each year. It has increased gross profit margins from 39.0% to 52.3%. And most importantly, NVIDIA has grown earnings by a rate of 38% per year.
From a historical perspective, the company's growth has been tremendous. But the opportunity to build on this strong performance and to widen the company's market share is what will lead to a dramatic increase in the stock price.
In addition to growing the overall business, the management team is also working hard to create value for the shareholders of the company. NVIDIA currently has more than $3.7 billion in cash, and the debt-to-equity level is very attractive at 0.38. (This means that the company has $0.38 of debt for every dollar in book value - a relatively conservative level.)
The management team has instituted a dividend program, giving investors a 2.1% yield. At the same time, the company has an accelerated stock buyback program, which helps to increase earnings per share for existing investors. (When the company buys back shares, net income is distributed over fewer shares outstanding, increasing the earnings per share for stockholders.)
Don't buy the stock for the dividend. We're going to make a lot more money as the stock price ramps higher. But it IS nice to know that we will get paid as we wait for the stock price to increase.
Analysts currently have a wide (and fairly conservative) range of estimates for NVIDIA's earnings over the next two years.
Assuming the company is only able to generate $0.90 per share this year, and further assuming that NVIDIA continues to grow earnings by its 38% compound annual growth rate, it is more than reasonable to assume that the company will generate $1.25 in earnings in the 2014 calendar year.
With NVIDIA's strong growth, coupled with expected improvement in the semiconductor area, investors are likely to place a multiple of 40 on the stock. Investors are currently apprehensive with semiconductor stocks because of the transition from the PC to mobile market. But as it becomes clear who the winners and losers are in this new environment, investors will be willing to pay a premium price for growth.
If you take a company with earnings of $1.25 per share and a growth multiple of 40, you get a stock price of $50 per share. This is well above the current price near $14.50, and represents a gain of roughly 245%!
The Stock Has Already Begun Moving - Don't Wait Any Longer!
As you can see in the chart below, NVIDIA has already begun trading higher after staging a multimonth basing pattern.
Investors are beginning to understand how this company will rise above the competition, and they are buying shares and pushing the price higher.
As a general rule, I like to see stocks trading higher before I buy them. It makes sense to wait until Wall Street begins to validate my research before pulling the trigger on a new investment.
Now that NVIDIA has moved sharply higher, I'm confident that the stock will continue to appreciate. Over the last few weeks, the stock has drifted a bit, giving you a shot at a good entry price below $15.
As the semiconductor market shifts from computers to mobile devices, this is the stock that will benefit the most!
Sentiment: Strong Buy
If there was one trend we saw picking up steam in 2013, it was the Android home console. Even if consumers failed to pick up on them, many attempts were made. First came the Kickstarter funded OUYA, followed by similar attempts by GameStick, and even MadCatz decided they’d give Android gaming a-go. With the video game industry raking in billions of dollars every year, it seems to only make sense that smartphone manufacturers are looking for their shot to cash-in.
The latest OEM to hop on the bandwagon is Huawei who, during last week’s CES, debuted their first Android-based gaming console dubbed “Tron”. I know, you’re about as enthused as the last Android console making the rounds, but this one seemingly has potential. We had a chance to go hands on with the console, and were surprised with how well the Android experience translated to the big screen.
Huawei Tron DSC05331
Powered by an NVIDIA Tegra 4 processor, the Mac Pro-styled console boasts specs typical to high-end smartphones and tablets. The Tron features 2GB of RAM, 32GB internal storage, micro SD card slot for expandable memory. All this for under $120. Not too shabby at all. Picking up the Tron’s controller, we noticed it felt much more solid than its OUYA rival, featuring a handy touchpad for mouse navigation, staggered analog sticks like the 360, and the weight of a PS3 controller.
•Nvidia Tegra 4 processor
•16/32GB internal storage – microSD card slot
•Wi-Fi a/b/g/n/ac and full-sized ethernet port
•USB 3.0, HDMI out, headphone port (also in the controller)
•Android 4.2.3 with custom UI
Huawei Tron ports
As it stands, this will be China-only when it launches in Q2, but the Huawei rep we spoke with mentioned the company’s plans to expand availability to outside markets. What’s more is Huawei said current specs aren’t set in stone, with the company already eying the recently announced 192-core NVIDIA K1 processor
Sentiment: Strong Buy
Google’s Android operating system has been a key factor in the growing trend of the increase in video gaming consoles within the gaming market. According to the WSJ, Chinese players are entering this burgeoning market, launching affordable micro-consoles that let people download and play games in living rooms. The article indicates ZTE Corp., a telecommunications equipment supplier that also makes smartphones recently launched a joint venture with Chinese video game company The9 for its new micro-console called the FunBox which retails for $112.
Mobile Commerce Press / Google
Chinese consumers are clearly mobile and online. Consumer electronic services are very widespread and China is significant in its e-commerce and social media. Consumers are very willing to shop online. Challenges still arise in China in its talent shortage of technology workers. The demand is clearly there for China requiring more jobs. Millions of jobs and online areas are lagging. Government faces pressures to improve performance and efficiency.
The article also highlighted how Huawei unveiled the Tron, a cylindrical-shaped console that, like FunBox, runs on a version of Android and comes with Nvidia’s Tegra 4 processor. Huawei plans to start selling the Tron in the second quarter in China. Huawei hasn’t announced the console’s exact price, but it will likely cost less than 1,000 yuan ($160), according to the company. Chinese technology firms are seeing a big opportunity in China’s video game market. According to Huawei, China has about 400 million people who play video games.
The Ouya console is one of the most prominent companies within the market. Ouya’s microconsole has reached over 500 games through its Discover storefront. The downloaded games met a milestone after it was announced by Ouya founder Julie Uhrman on the company blog that more than 25,000 developers were registered. 2013 was a fantastic year for gaming hardware. Game industry console revenues are expected to rise throughout this year. Ouya also is set to release a new hardware revision for next year.
Game consoles were banned in 2000 to protect youths from a perceived corrupting influence, a move that was temporarily lifted this month. According to Bloomberg, China’s Ministry of Culture, one of the government bodies that monitors media content, will be responsible for drafting new rules on video-game consoles after a 14-year-old ban was lifted. The rules will be written as soon as possible, Cai Wu, the head of the ministry, stated.
Sentiment: Strong Buy
5. Several Surprises
Navigating and browsing the internet was surprisingly intuitive. Use the D-Pad or Left Thumbstick to scroll up and down pages and the Right Thumbstick to move the cursor. The latter is often trumped by simply touching the screen. But there is a lot of comfort in using the controller for intern use.
The seamless HDMI-out functionality was a nice surprise. I paired the SHIELD with a wireless keyboard and mouse, thereby untethering myself from the unit so I could sit on the couch beyond the reach of my 6ft HDMI cable. This gave me full PC style control over my games as the SHIELD streamed them from my PC at home, to a neighbor’s 40-inch HDTV pushing 1080p. Overachiever here — SHIELD is capable of pushing 4K resolutions to a compatible HDTV!
6. Value Meal
Shield-features-before-and-The SHIELD is no one-trick pony. It wears many hats, making it a Swiss Army knife of a product and a marketing headache for the PR and marketing teams over at Team Green. Positioning the product in front of a target market is difficult when it shows appeal to so many. Yet realistically, the SHIELD has something for any gamer. You get a gorgeous 5-inch touch screen Android tablet (unskinned) and a mobile console to access today’s and tomorrow hottest game titles. High end AAA game content will be streamed from PCs kitted with supported Nvidia GPUs. As long as the host PC meets the system requirements there is little worry there. If your PC doesn’t have a supported GPU, then GRID is shaping up to be a solid option pulling high end game content from the cloud.
The Android OS lends itself seductively to classic gamers as well, with a wealth of emulator apps. Play old console games from Nintendo and Sega. Or use GameStream to do so from your PC using your own installed emulator software. Diehard mobile gamers will be right at home and enjoy added functionality for their Android games with the built-in controller.
7. Needs More Mobile
A few things could be cleaned up, however. The unit is a veritable Xbox controller with the touch screen lid closed. So toting it around comfortably is difficult. Nvidia offers a carrying case, sold separately. But it’s only a SHIELD-shaped hard case with a wrist strap. The device could use a backpack attachment of some sort — something that can fit a mobile-styled keyboard and mini-mouse. Nvidia is already promoting such accessory use–might as well go the distance. They even offer a list of lapdesks for when using SHIELD with a keyboard and mouse. How about a transformable lapdesk that doubles as a small but stylish carrying case? A mobile gaming device should be more travel friendly
Sentiment: Strong Buy
Baked in from launch is the ability to stream games from your PC games library. With immense enjoyment, I have streamed Titanfall, Warframe (Melee 2.0,Yo!), ARMA 3, Hawken and Borderland 2. You need a Nvidia GTX 600 series video card or higher. I’m using a EVGA GeForce GTX 780 Classified The company has also tacked on support for new laptops using the newly minted 800m series GPUs. But remote game streaming, arguably the most sought-after, is the new feature on the block. Nvidia recommends a minimum 5mb/s upstream for the bandwidth needed. Gaming with less than that is possible. Low bitrates may murk up the image just a bit. However using less than the prescribed 5mb/s will require your SHIELD to be on the same continent or at least within about 1000 miles apart from the host computer. A sub-100 ping will also help retain the quality of the picture and how smooth the game runs.
When traveling out the country from the host computer, make sure the network used to connect offers speeds above 10-12mb/s with an attractively low ping.
4. GRID Cloud Gaming
Here’s another new feature on tap. All 14 games listed are free to play right now on SHIELD — and from virtually anywhere. Prominent among them are The Witcher 2, Race Driver: GRID, Darkstalkers 2 and Street Fighter X Tekken. This one is still in Beta form. If your SHIELD can access a network close enough to Nvidia San Jose, CA. servers producing a 40ms or less ping, then you’re golden. Oh that connection also requires a bandwidth of 10mbs down. Nvidia also recommends a 5GHz WiFi router, which I do not have. Yet I was able to play The Witcher 2, Street Fighter X Tekken and all the other games available on GRID — with few problems. I experienced the occassional hiccup but nothing that marred the experience.
This is an amazing feature and adds another major pool from which gamers can draw content (Google Play, Tegra Zone, GRID, Steam). This further cements SHIELD in a unique position as a mobile console for high end gaming
Sentiment: Strong Buy
Nvidia SHIELD, has been on the market for nearly 9 months now and a lot has changed in that time. The company has done the unthinkable by adding immensely sought-after features while simultaneously slashing the overall price by $100. It’s hard to believe, SHIELD was announced with a $350 price tag. Yet it launched with a reduced $299 MSRP. Now you can nab one for a cool $199 (through April). The Android-based portable gaming device has been updated to the latest Android KitKat 4.4.2 operating software. Plus it streams games from your PC if outfitted with supported Nvidia GTX video cards. But that’s not the extent of its laudable capabilities.
1. Hands-On Feel
The Nvidia SHIELD is surprisingly comfortable to hold, as you might imagine. You grip the thing like your garden variety Xbox controller. It weighs in at 1.28lbs. There is definite heft but the unit can be easily held in a single hand. It also feel very solid and well constructed. The caveat to all that is that it does feel like a controller lost in time. The sizeable plastic buttons are very clicky-clacky when pressed. Again the construction and solid feel in-hand are praise-worthy. It just feels like business as usual where the controller is concerned. It lacks elegance, yet is immensely familiar and intuitive.
This thing is gorgeous. It’s a 5-inch window pumping HD 1280 x 720 (720p) with 294ppi. The display is multi-touch and “retinal-quality”. Marketing-speak aside, the display performance thoroughly surprised us. It looks fantastic with excellent color saturation, sharpness and clarity. Movies, text, images and games show are rich beyond even that of the Samsung Galaxy S4.
Booting the device to the home screen takes a full 25 seconds. That’s a bit long. But once it’s up and running navigating through unskinned Android ecosystem is butter smooth. All commands are respond with earnest making the device very peppy and responsive by today’s high end mobile device standards.
Sentiment: Strong Buy
NVIDIA (NVDA) is an established name in Graphic Processor Units (GPU). The company’s latest quarterly results were strong. This is a good sign for the company, as well as investors who had patiently waited for some extraordinary growth.
The company’s sales in the past were in the doldrums with the sun setting over the PC market, but this was offset by growth in high-end gaming GPU sales. Although the market for mobile gaming and next generation gaming consoles has been rising, NVIDIA was still focused of the declining PC market. This further created a dent in sales figures for a player like AMD (AMD), which was not as focused as NVIDIA in this market.
Now, with analysts reporting a rebound in the PC market, this should further help NVIDIA improve. In recent times, NVIDIA has been impressive with latest new products that have enabled it to make a U-turn in its business. New growth opportunities in the vehicle infotainment segment can be catalysts for NVIDIA’s growth. As per IHS, global sales of infotainment systems were $34.6 billion with Panasonic as market leader. The growing opportunity here could double by 2017 and companies like NVIDIA can take a bigger bite of the market share from Panasonic.
Aiming to Be the Leader in PC Games
As already stated, the rebound in the PC market is providing a tailwind to the company’s growth prospects. The gaming industry is worth around $100 billion annually. This market is spread across mobile devices, consoles and PCs. Last year, Xbox and PlayStation-4 were launched, which created a boom in console gaming revenue, but the PC market which is said to be declining in the past has a bigger market than console gaming. The major market of PC gaming comes from the Asia Pacific region and it is estimated to be a $15 billion industry, while in North America it almost a fourth of this, amounting to around $3.9 billion.
NVIDIA continues to benefit from the rebound of the PC market which led to growth in the PC gaming market. Revenue from GeForce gaming GPUs increased 15% in fiscal 2014. The company’s market share in discrete GPUs is also rising to an effect that NVIDIA now holds 65% of the market share in this segment. Back in 2010, this was an even market with AMD, but now the gap is widening every year
Outperforming Its Competitor in Notebook Gaming
This is a segment where NVIDIA anticipates a rapid growth and may out-perform its competitors. The latest Maxwell-based notebook GPU is slimmer and lighter and has higher battery life due to Maxwell’s enhancement of energy efficiency. Maxwell is based on Kepler architecture that competes with AMD’s Radeon R9 270. On the power efficiency front it beats its competitor AMD’s Radeon but we don’t witness any huge speed gain in the new Maxwell GPU. Finally, on the price front, it is much cheaper than Radeon with two variants priced at $119 and $149 as compared to $179 for Radeon.
What Makes NVIDIA Better
NVIDIA mainly concentrated on the GPU market while AMD was bootstrapped with its focus on CPUs and GPUs and also to some extent on gaming consoles. As AMD’s focus was distributed, NVIDIA only concentrated on the specialized market of GPUs and stimulated itself to be a market leader in graphic cards and GPUs.
Research and Development is the platform for any successful product development and enhancement. NVIDIA is extravagant on it. Its R&D budget enables it to churn out products that are innovative.
NVIDIA's latest products are doing well and its business has turned around. Its future looks bright with its new GPU, making it a good buy.
Sentiment: Strong Buy
As China’s Xiaomi Corp. began selling smartphones in Singapore this year, each batch sold out in just a few minutes. So when the company asked people on Facebook to spread the word that more phones would be available soon, one fan was having none of it.
“Spread the word so that my friend can compete with me to buy the phone in under 8 minutes?” wrote Zen Yeo, a 31-year-old documentary film director. “You must be kidding me.”
Such is the fervor for Xiaomi. Though the Beijing-based company is little known beyond Asia, it has become one of China’s top competitors in four years. Xiaomi’s appeal: It offers the technology and style of Apple Inc. (AAPL) or Samsung Electronics Co. (005930) at less than half the cost.
Now founder Lei Jun, 44, is taking his formula abroad. He’s beginning in markets with Chinese populations like Singapore and has hired Google Inc.’s Hugo Barra to lead the effort. Lei’s goal is to boost sales fivefold to 100 million phones in 2015.
“We’re moving as fast as we can,” Barra said. “We’re working around the clock with our supplier and manufacturing partners to meet demand.”
Xiaomi reflects a shift in China’s economy, with technology companies gaining prominence to match state-owned enterprises in sectors like oil and coal. The country’s standouts include Internet portal Tencent Holdings Ltd., computer maker Lenovo Group Ltd. (992) and Alibaba Group Holding Ltd., the e-commerce company headed for a multibillion-dollar initial public offering.
Make People ‘Scream’
Xiaomi is an example of a Chinese company succeeding through innovation and creativity, precisely the characteristics they’re supposed to have in short supply. The company’s phones run on Android, the operating system available free from Google and used by Samsung, among others. Lei makes his phones stand out through sleek design, software that anyone can customize and prices rivals won’t touch. He’s said that, more than revenue or profit, he wants to create products that make people “scream.”
Though the Singapore launch has been strong, the question for Lei is how well Xiaomi will translate in other new markets. Beyond China, his brand lacks the profile of BlackBerry Ltd. and Nokia Oyj (NOK1V), never mind Apple or Samsung. The task is doubly complicated because Xiaomi’s secret to keeping prices low is that it doesn’t advertise and sells directly over the Web.
“If nobody knows about you, certainly they are not going to buy online,” said Jeongwen Chiang, chairman of the marketing department at China Europe International Business School in Shanghai. “There will be some difficulty to overcome.”
Lei founded two companies before he was 30, selling one to Amazon.com Inc. (AMZN) for $75 million and leading another, Kingsoft Corp., to its initial public offering. He remains chairman of the Beijing-based developer of business and gaming software.
In Xiaomi, which means millet in Chinese, he has built a successful company even as the riptides of the mobile-phone market have battered former leaders such as Nokia, BlackBerry and Motorola Mobility. Xiaomi’s valuation hit $10 billion with a fundraising round in August, or double the value of Waterloo, Ontario-based BlackBerry now.
“They did the right thing at the right time,” said Sandy Shen, an analyst with Gartner Inc. “Xiaomi addresses a segment that has been underserved by major brands, which craves the coolness of the latest technology at affordable prices.”
In expanding abroad, Lei is beginning in Southeast Asia, where the Chinese diaspora gives him a head start in name recognition. Xiaomi will begin selling phones in Malaysia in a few weeks, with Indonesia, Thailand and the Philippines following shortly, Barra said. The company is actively looking at India, Brazil and Mexico, too.
Xiaomi will continue to focus on Web sales as it expands abroad, though it may try new approaches in certain spots.
“We will continue to follow our model of online sales and mobile operator distribution while allowing ourselves to experiment with other channels where it makes sense to do so,” Barra said. “We are constantly trying new things at Xiaomi.”
Brydan Foo, a 23-year-old Singaporean student, tried for months to import a Xiaomi phone without any luck. When the company’s Redmi phone went on sale in February for S$169 ($135), he scrambled to buy one before it sold out.
“From last year, I started to notice this Xiaomi,” Foo said. “The main thing that got my attention was the price. There have been a lot of similar products in terms of quality and design at easily three times the price.”
One challenge is expanding production to meet demand. Like most other major mobile-phone makers these days, Xiaomi doesn’t make its own devices and relies on contract manufacturers, such as FIH Mobile Ltd. (2038) and Inventec Corp. (2356), to build them.
Xiaomi has to persuade suppliers of its prospects so they’ll invest in plants and machinery -- and rapidly, given its growth. Xiaomi has boosted supply commitments 31-fold since November 2011 to 3.2 million devices a month as of December.
“We will continue to improve manufacturing capacity as we expand into more countries,” said Bin Lin, Xiaomi’s president and co-founder. Lei declined to discuss overseas expansion plans.
Xiaomi’s rise has been aided by Lei’s track record as one of China’s most active entrepreneurs for more than two decades. Lei, whose name can be translated as “Thunderous Army,” is one of the most popular figures on Chinese social media, with more than 8 million followers of his Sina Weibo microblogging page.
He isn’t as well-known beyond China as fellow technology pioneers, such as Alibaba’s Jack Ma and Baidu Inc.’s Robin Li. Unlike them, Xiaomi’s chief executive officer doesn’t speak English.
Lei has said he learned computer programming on the Apple II model in high school and considers its designer, Steve Wozniak, to be an early inspiration.
After completing coursework at Wuhan University in two years, Lei helped found software maker Kingsoft in 1992. He served as CEO from 1998 through 2007, during which time he oversaw the company’s expansion from office application software into Internet security and online games.
While running Kingsoft, Lei helped establish other Internet companies, including co-founding Joyo.com in 2000. Lei built Joyo.com into China’s largest online retailer of books, music and videos. Amazon bought the company in 2004 and it became the core of the Seattle-based company’s China operations.
That track record has made it easier for Lei to line up backers for Xiaomi, said Richard Liu, managing director of Morningside Venture Capital. Morningside is the earliest and single-largest external investor in Xiaomi, Liu said, without supplying the value of the investment or size of the stake.
“Lei is very capable so, no matter what he wants to do, he has a high chance to be successful,” said Liu, who has known Lei since 2003. “He’s a world-class entrepreneur with vision, leadership and ambition to really build up a global company.”
Xiaomi initially raised $131 million from backers including Singapore’s Temasek Holdings Pte., Qiming Venture Partners, Qualcomm Ventures, IDG Capital and Morningside. Its fundraising valuation in August puts it close to the almost $12 billion market value of Lenovo Group Ltd., the Beijing-based computer and smartphone maker that’s been around since 1984.
“Xiaomi is going to be a huge company,” said Hans Tung, one of its earliest investors and a board member from 2010 to 2013. “They don’t have any immediate plans for developed markets like the U.S. Instead, they are trying to be big in Southeast Asia, India and Latin America.”
Xiaomi’s rise is all the more dramatic because it comes as hardware companies everywhere have struggled. Personal-computer makers like Dell Inc. have floundered as PCs became commoditized, and mobile-phone makers have gone through a brutal shakeout. Even Samsung, the world’s largest smartphone maker, has posted two straight declines in quarterly profit.
China has been a fortuitous base. The wireless market has exploded to become the largest in the world, with 1.25 billion users now compared with 647.7 million in March 2009.
That’s bolstered the fortunes of Chinese phonemakers, from Xiaomi and Lenovo to Huawei Technologies Co. and Coolpad Group Ltd. Huawei and Lenovo were among the top five smartphone vendors worldwide last year, shipping a combined 94.3 million units, according to researcher International Data Corp. Global shipments surpassed 1 billion units for the first time.
Xiaomi captured 7 percent of the China market in the fourth quarter, ranking just ahead of Apple, according to researcher Canalys. Lenovo, Coolpad and Huawei also sold more than Apple, often with devices costing as little as $100.
Xiaomi has distinguished itself through its approach to social media and marketing over the Internet. Lei pushed the strategy early on, and his status as a tech industry celebrity helped him draw attention. In addition to his personal followers, the company’s Weibo microblogging account is tracked by more than 8.5 million followers.
The company caters to these hardcore fans, who support the brand by word of mouth and make up for the lack of advertising. Xiaomi’s website lets customers give input on product plans through the company’s blog and interact through discussion groups. To celebrate the company’s fourth anniversary this month, Lei declared a “Fan Festival” online shopping event with discounts and coupons. Lei autographed invoices for some buyers.
Apple is getting more aggressive on Xiaomi’s home turf. It just cut a deal to sell phones through China Mobile Ltd., the world’s largest carrier, after only being available on two smaller operators. China Mobile will expand iPhone sales to more than 300 cities by year’s end from 16 in January, Chief Executive Officer Tim Cook said on a Jan. 27 conference call.
Xiaomi vs. Apple
In China and beyond, Apple may struggle with customers looking at specs, rather than brands. Compared with the iPhone 5c, for example, Xiaomi’s Mi3 has a larger, sharper screen; a camera with higher-density pixels; and speedy quadcore processors from Nvidia Corp. or Qualcomm Inc. The Mi3 sells for 1,999 yuan without a contract, compared with 4,488 for the Apple device.
“From the standpoint of processor, screen size and camera, it is superior to the iPhone,” said Jessica Kwee, a Singapore-based analyst with Canalys. Carolyn Wu, a Beijing-based Apple spokeswoman, declined to comment on competition with Xiaomi.
Lei and Xiaomi have been described as China’s answer to Jobs and Apple because of the obvious similarities. Both companies make smartphones and their physical designs are similar -- rectangles with rounded edges and touch screens. Lei also favors jeans and black shirts, like the Apple co-founder.
Still, the tactics and strategies are very different. While Apple engineers are famous for secretly concocting new products at the Cupertino, California, headquarters and then presenting them as gifts from the heavens, Xiaomi solicits customer input and incorporates their thoughts. The Chinese company also lets people modify their phones’ software and swap out batteries or SIM cards. Apple doesn’t even let customers touch the iPhone’s battery -- and got sued because of it.
Pricing is a reflection of deeper differences. Apple positions its phones at the top of the market -- premium products that people should pay up for. Lei has said that Xiaomi is more like Amazon than Apple in that respect. It sells products as close to cost as it can -- making money on content and services.
The question is whether that approach will work overseas, in markets with lots of cheap phones and where Xiaomi hasn’t built up brand-name appeal. It likely will become more difficult as the company moves beyond countries like Taiwan and Singapore where Chinese speakers are familiar with the upstart.
“In a mobile-phone landscape, Xiaomi’s rise to prominence is not an everyday occurrence,” said Melissa Chau, senior research manager for client devices at IDC Asia/Pacific in Singapore. “Whether they can rise to the next big milestone of becoming a global player is their next big challenge.”
Sentiment: Strong Buy
Shares of graphics chip company NVIDIA (NASDAQ: NVDA ) have soared over the past year, rising about 50%, with sales of the company's high-end gaming GPUs making up for a weak PC market. The rise of mobile gaming and the new generation of game consoles haven't hurt the PC gaming market at all, and NVIDIA will continue to benefit from strong global demand for PC gaming products. While competition from AMD (NYSE: AMD ) is a threat, a lack of focus from the troubled competitor gives NVIDIA an important advantage.
NVIDIA's edge in PC gaming
The gaming market generates revenue in excess of $100 billion per year, spread across game consoles, PCs, and mobile devices. While the launches last year of the Xbox One and PlayStation 4 created excitement around console gaming, the PC gaming market is actually larger than the console-gaming market. Much of this is thanks to the Asia Pacific region, where PC gaming is a nearly $15 billion industry, compared to just $3.9 billion in North America.
NVIDIA has benefited from the growing PC gaming market, with revenue from its GeForce gaming GPUs rising by 15% in fiscal 2014. This growth came during a continuing decline in the PC market as a whole, with NVIDIA specializing in one of the few areas that have remained immune to the PC sales slump. NVIDIA's share of the discrete GPU market has also been on the rise, with the company now commanding around 65% of the market. NVIDIA was nearly even with rival AMD back in 2010 in terms of market share, but the gap has been widening each year.
There are two reasons why NVIDIA has managed to pull so far ahead of AMD. First, while NVIDIA focuses solely on graphics and visual computing, AMD does CPUs and GPUs, as well as semi-custom deals like the game consoles. With AMD's focus spread between different businesses, it's no wonder that the more specialized NVIDIA has become the market leader.
Second, NVIDIA now spends more on research and development than AMD. In the last fiscal year, NVIDIA spent $1.336 billion on R&D compared to AMD's $1.201 billion, and the trends for the two companies couldn't be more different.
Source: Morningstar, Author's Calculations
A company that continually slashes R&D spending is a company that falls behind its competitors, and with AMD attempting to compete in multiple markets, NVIDIA's lead may soon become insurmountable.
Going forward, there is one development that should help NVIDIA further grow its gaming GPU revenue in 2014 and beyond. The first GPUs built on the company's Maxwell architecture have been announced, and the focus on energy efficiency puts NVIDIA in position to dominate two portions of the PC gaming market.
The GTX 750 line of entry-level desktop GPUs was announced in February, and the cards manage to cut power consumption in half while doubling performance compared to NVIDIA's entry-level GPUs from three years ago. That's a quadrupling of performance per watt in just three years, and the lower power consumption makes these cards perfect for small form-factor PCs, such as the upcoming steam machines.
NVIDIA also expects the gaming notebook market to grow rapidly in 2014, and its new line of Maxwell-based notebook GPUs allow gaming notebooks to be thinner and lighter than ever before while achieving an acceptable battery life due to Maxwell's energy-efficiency improvements. NVIDIA's lower-end 840M notebook GPU triples the performance of Intel's integrated graphics while using nearly the same amount of power, making NVIDIA's discrete graphics cards a real option for midrange gaming notebooks.
The bottom line
With AMD slashing R&D spending while splitting its attention between different areas, NVIDIA has the opportunity to cement its status as the leading graphics chip company. The PC gaming market is growing despite weak PC sales, and NVIDIA's dominant market share is no accident
Sentiment: Strong Buy