What's there? 900MM isn't for GPU only as you stated, but GPU, software, VLSI, Content and Process R&D. Of those Tegra gets benefts of Software, VLSI, content and Process R&D, on top of the 300MM exclusively dedicated to Tegra.
Without all of these segments nVidia could not bring a GPU to the market. There is a reason why Kepler is so dominant.
When a product is responsible for less than 20% of your revenues, has negative operating margins but eats 25% of your R&D budget and benefits from a sizable portion of the other 75%, this is where you are betting your farm.
And we ignoring that they have much more new products in the pipeline which are not out right now. Tegra 4i and i500 are two products which have no preprocessor but need R&D. On the other hand: Intel's Silvermont has negative operating margins, too.
But... You have to be very careful when reading Nvidia investor material. Reading Nvidia material is the business equivalent of racing against Dirk Dastardly.
I don't said anything about their marketing material. I only showed what they investing into their GPU business.
have a look at slide 15. Did you notice the nice CAGR number? Nice, isn't it? Did you notice what the higher numbers are? Yes, not GPU.
I guess that the reason why they are investing into Tegra...
But this is just the beginning. Did you notice that they chose FY10 (2009) for baseline? Yes, this is the first shennanigan here, because it was a very bad year for the GPU business, far worse than 2007 or 2008. Put those two and you may have close to 0% CAGR.
On the next slide you see all three years.
BTW: 10 years ago nVidia's revenue was only around $500 millions per quarter.
But there is more. Still on slide 15, what about that CAGR number for Geforce Gamer and Geforce OEM? Sounds a healthy market, doesn't it? But once you cross reference the numbers with Nvidia overall market share and overall size market, you can see why they can get those nice numbers. Nvidia is eating AMD market share, as you can see in slide 19.
That's a problem for you? Ironic because:
The x86 market crashed? I didn't see that from Intel revenues. I saw the market shrinking, not crashing. The only thing crashing in the x86 market was AMD, but not the overall market.
On the same slide 19 they show us something new. They mention a 12% CAGR for their GPU business and mentions the 3.2 billion in revenues. This 3.2 billion in GPU revenues includes 300 million of Intel settlement, and this revenue is pratically net. Purge this and CAGR becomes far smaller.
Why should nVidia? The reason Intel is allowed to sell Haswell with a iGPU is because of the settlement. Maybe we should "purge" the iGPU from Haswell and discuss the threat of Intel to the low-end without an iGPU.
Once we purge this revenues we can verify that the overall market has slightly shrunk since 2009. Purge the revenues from the PSB business and you can see that Geforce business shrunk even more.
The Geforce business increased the revenue from last year, you can read it here:
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTcxNjMzfENoaWxkSUQ9LTF8VHlwZT0z&t=1
As I said, the downward trend in the dGPU market is there for everyone to see. Nvidia management is doing the right thing in running away from GPU. The market is shrinking, and the attack it is going to face from Intel and AMD isn't something they can support.
The market is shrinking, but not their revenue. It's no different to Intel which eating into AMD's share to get higher revenue.
On the other hand nVidia is expanding their GPU IP into more and more markets which will help them to growth further.
Intel CPU business isn't reporting losses because Haswell or Broadwell aren't generating revenues, same with Nvidia GPU business, they aren't reporting losses in their GPU business because Maxwell isn't generating revenues. This is to be expected, no? You fund R&D for future products with current products revenues.
"Current products revenues" without "current products"? How is this working?
And you can clearly see that on Nvidia financial statements. Nvidia didn't report an operating loss of $157MM for every business of them except GPUs, but for the Tegra processor business only, meaning that only what is directly related to Tegra is included as operating expense to get to this number.
They bought Icera for more than $300 millions, investing into LTE and integration of LTE into an application processor. Validate their LTE on different carrier networks. All this cost money. Maybe you should look up what "investment" means.
With the data they provided you can also have a glimpse of their sub-30% gross margins in the Tegra business... but let's leave that for another thread.
Pls, stop it. nVidia disclosed all numbers. Gross margins for Tegra products around 50%. That in the near of Intel's gross margins. Tegra attributes to the overall gross margins because it'S higher than the chipset business and the Geforce OEM market.
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