This week we learned that Nvidia (NVDA) is pushing its tablet strategy by drawing up a reference design called "Kai," whose objective is to hit the $199 price point with a Tegra 3 SoC. This, in a way, is Nvidia's way of shooting at a moving target, with the moving target being Amazon.com's (AMZN) Kindle Fire.
Why do I call it a moving target? Because somehow Nvidia seems to think that its target is stationary, even when there's good reason to think that it will be jumping to some other place soon. The reason is that a few days ago, there were reports of Amazon pitching ads on its Kindle Fire welcome screen to ad agency executives from $600,000. Since Amazon has already used the ad-supported model on the Kindle e-reader and that led to a lower retail price, it's pretty obvious that soon we'll see an ad-supported Kindle Fire, most likely at $149 or $99.
This might also be Amazon's way of answering the rumors that Google (GOOG) is about to launch a tablet for $199 or less. But at least these rumors also indicate that Google might be targeting $149, which shows whoever is running that particular show is a bit more realistic than Nvidia's tablet strategist.
In short, someone needs to ring a bell over at Nvidia and tell it to start looking ahead. To quoting Wayne Gretzky: "A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be."
In Other News
Somewhat lost in the news maelstrom of the last few weeks was the report that Apple (AAPL) will include Nvidia GPUs in their upcoming MacBook Pro. Not only does Nvidia displace Advanced Micro Devices (AMD), but this is also good news in the sense that the "retina revolution" might require enough graphical firepower such that integrated graphics -- as those on Intel's (INTC) Ivy Bridge microprocessor -- are still not enough to drive the new pixel-stuffed screens. However, that might only delay the inevitable, with the inevitable being that at some point down the road integrated graphics will reach the "good enough" point.
Conclusion
Having been somewhat negative on Nvidia since my article "Nvidia Faces Challenges," when the company traded at $14.91, and given the recent developments and where the general market is trading, I cannot justify staying negative on it any longer.
