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Nvidia's financial results and the trend away from the traditional PC

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by Grant Brunner, 12 Nov 2012Features
Nvidia's financial results and the trend away from the traditional PC

Apple’s success in the tablet industry hasn’t just been a boon for its shareholders. The iPad took a bite out of the PC industry, and now other companies are getting in on the tablet game. While traditional PCs and their innards still make a significant amount of money for companies like Nvidia, it’s clear that mobile is the place to be. “Skate to where the puck is going,” and all that jazz.

At the end of last week, Nvidia released its third quarter financial results, and there is some really interesting information embedded in this rather banal news. One of the most interesting facts that was pointed out was how a third of Nvidia’s revenue now comes from selling chips that aren’t for traditional PCs. In the last year, the number of tablets shipped using Nvidia chips, like the Tegra 3, have doubled. That’s a big deal for the green machine.

Traditional computers are far from dead. PC and server CPUs are estimated to pull in a combined $41 billion (£26 billion) in 2012. In comparison, mobile chips will likely be in the $5 billion (£3 million) range. It’s quite clear that mobile devices are growing at an incredible pace, so the once dominant PC market is taking s back seat. The trend couldn’t be any clearer: Any company that makes its money from producing PC internals now should absolutely be dedicating resources into developing mobile components.

While smartphones and tablets are certainly the biggest chunk of the non-PC market, there are a few notable examples of other products. Specifically, game consoles and set-top boxes have a lot of potential for garnering sales for the Nvidias and Qualcomms of the world.

Apple is selling millions of Apple TVs every year, and Roku and Boxee are getting a nice slice of that pie as well. The Xbox 360, PS3, and Wii have all sold tens of millions of units. When you look at all of these devices, the PC looks less and less like a safe bet. While a dedicated laptop or desktop is likely to stay popular for the next decade or two, how long until a dedicated workstation is a niche product? This isn’t a crazy “in 2000, we’ll all have flying cars” idea – we’re seeing the switch away from traditional PCs take place right now.

In our lifetime, we have seen the rise of the personal computer and it’s looking like we’ll likely see the fall of the PC as well. While this change might spook some PC diehards, it is a good thing. Not only in a business sense, but it’s good for consumers too. Technology is being moulded to fit our needs instead of vice versa. We are no longer shackled to the desk if we want to use computers. Tablets, phones, consoles, and set-top boxes are becoming fully fledged personal computers, and that’s glorious news.

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