SAN FRANCISCO—Google Inc.'s Nexus 7 tablet is not a less expensive alternative to Apple Inc.'s iPad, but the best realization yet of a tablet with the potential to tap the millions of Android users worldwide, according to Jen-Hsun Huang, president and CEO of chip maker Nvidia Corp.
"The Nexus 7's value proposition is not to be a cheaper iPad," Huang said. "It's to be a peripheral or a companion device for someone who is really invested in the Android operating system."
Previous Android tablets have failed to catch on in a major way. But Huang said the Nexus 7 is the first to make it really easy for Android users to enjoy all of the content and applications they have invested in for their Android smartphones on a device with a larger, high-resolution screen.
"I think it's taken this long to really build a platform that adds value to Android users," Huang said. "It's not an alternative to the iPad—it's really a device that enhances the user experience for someone who is an Android user. And there happens to be hundreds of millions of Android users."
Huang's comments came on a conference call with analysts Thursday (Aug. 9) following Nvidia's strong second quarter financial report. The company reported sales and earnings for the quarter and gave third quarter guidance that exceeded analysts' expectations.
Analysts and gadget enthusiasts have speculated on the potential of Nexus 7 tablet to break the iPad's strangehold on the tablet market. The iPad held 66 percent share of the tablet market last year and is projected to have 61 percent market share this year, according to a recent report by Canaccord Genuity.
Nvidia's Tegra 3 is the applications processor in Nexus 7, which was
announced in June and began shipping last month. It is the first tablet to use version 4.1 of Android, nicknamed Jelly Bean.
According to Huang, the Honeycomb version of Android which ran the first Android tablets was actually very different from the Android phone OS at the time. Jelly Bean and its predecessor, Ice Cream Sandwich, are designed to run both tablets and smartphones and make it much easier to seamlessly share content and applications between devices, Huang said.
Huang said Nvidia notched design wins in 60 or more Android tablets during their first 18 months of existence, none of which caught on in a meaningful way. It took that time to get the cost, functionality and quality of experience of Android tablets to get where it needs to be, he said.
"I am really excited about the fact that the positioning of Android tablets is really starting to resonate with the market place," Huang said. "If you have an Android phone, you go get yourself an Android tablet, and all of your content just shows up."
Huang said he expects the tablet market to continue to offer more potential for Nvidia's Tegra applications processors than smartphones, where the company has about 2 percent market share, according to Canaccord Genuity.
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