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Is NVIDIA's Tegra K1 On Par With PlayStation 4, Xbox One?

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January 9, 2014 2:05 pm
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NVIDIA (NASDAQ: NVDA) claims that its newly announced Tegra K1 mobile processor will bring console-quality graphics to smartphones and tablets.

The processor (which will come in 32- and 64-bit varieties) consists of 192 cores and features the same NVIDIA Kepler architecture that powers NVIDIA’s GeForce GTX 780 Ti.

The chipmaker made one very bold claim in its press release:

“Tegra K1 is also the first mobile processor to deliver the same graphics features as the next generation of consoles (Xbox One, PlayStation 4) and faster performance than current generation consoles (Xbox 360, PlayStation 3), all in the palm of your hand.”

That sounds intriguing, but is it the real deal?

Wedbush analyst Betsy Van Hees is confident that NVIDIA will succeed. She was among those who attended NVIDIA’s press conference at the 2014 Consumer Electronics Show.

“I think NVIDIA has [the leading] graphics in the world and I think they demonstrated that with the announcement,” Van Hees told Benzinga. “We saw some pretty impressive demos. The K1 product is shipping and we expect to see it in devices in calendar Q2.”

Related: PlayStation 4 was Too Expensive for NVIDIA

Van Hees didn’t speculate on how much the Tegra K1 will cost, but she said that it was primarily designed for high-end devices.

“It’s not going to be for the average [smartphone or tablet],” she said. “It’s going to be for the high-performance [devices]. NVIDIA is doing the same thing with their Tegra that they have done with their [PC] graphics. They’re going after more of the high-performance market. We’re not gonna see this in the low-end market. It’s gonna be in the mid- to high-range. More high-range.”

PC Market Is Still Important

Mobile might be the way of the future, but Van Hees believes that NVIDIA will continue to benefit from the PC market.

“They will continue to dominate the PC gaming market,” said Van Hees. “That doesn’t seem to be going away.”

NVIDIA was once a prominent force in console gaming as well. In March 2000, Microsoft gave the firm an advance payment of $200 million to produce chips for the original Xbox.

In more recent times NVIDIA has moved away from the console business, but it could return in a roundabout way.

The company’s chips can be found within several of the new Steam Machines that are in development. Steam Machines are pre-built PCs, but the concept was heavily inspired by traditional game consoles.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

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