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November 21, 2006Wanna Invest In the iPod? Stick with Nvidia, one analyst says
Arik Hesseldahl
Here's still more fuel to the fire on the speculation of a video iPod and iPhone. An interesting research note crossed my desk this morning from FBR Research analyst Chris Caso concerning graphics chipmaker Nvidia and PortalPlayer, one of the main chip suppliers on the iPod.
Caso says he thinks Nvidia has landed one of its chips in the upcoming video iPod and that PortalPlayer has been designed out of it. But a PortalPlayer application chip has been designed into the iPhone. Either way its a win for Nvidia, which is in the process of acquiring PortalPlayer for $357 million."
One loser, Caso says, is Broadcom, which you'll remember, provided the video chip in the first generation of video-ready iPods. All this new iPod business for Nvidia, Caso says, will add $100 million in incremental revenue in 2007 once the deal to acquire PortalPlayer closes, plus another $30 million in business from non-Apple MP3 players.
On the iPhone he says "We believe Apple selected PortalPlayer so as to provide all of the functionality of an iPod with little software rework." He further says he expects Apple to move 22 million of the phones in 2007, which will have a revenue impact of $150 million on Nvidia.
07:08 AM
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Comments
22 million iPod phones is a bit of a strech, unless the phone and the video iPod are one and the same.
For the same device, price points would be different depending on how one purchases the phone.
1. Consumer buys the "iPhone" completely open, thus a $249 price point is the result. The phone can work on T-Mobile and Cingular networks.
2. The customer purchases the "iPhone" under Apple's MVNO program, and thus the phone runs $199.
3. Like option 1, a consumer buys the iPhone, but does not connect it with their phone SIM card, and it acts just like an iPod with no phone capabilities. Same price as option 1 at $249
This phone/iPod or both device, would leverage economies of scale Apple would be looking for, and is the major reasoning behind this move.
Alas, when it comes to predicting Apple product launches they are like a smoke-filled room with the lights off, so anything goes.
The second option is that Apple launches a full-screen 40 GB and 120 GB iPod HD (720p) at MWSF '07, making it the ultimate device for portable media, along with 720p video content, with Lucas joining Jobs on stage announcing 20th Century's Star Wars franchie an exclusive for iTunes (for probably a year), in HD glory...
Yes, we can once again buy the same Star Wars movies we've already purchased at least three times already!
In mid-February Apple holds a special event, and launches the iPhone, which is a completely different device from the iPod HD, allowing both markets to work themselves out, while Apple reaps from both.
Posted by: Steven at November 21, 2006 12:10 PM
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