Use access key #2 to skip to page content.

TheBlindCat (49.73)

Top 5 Reasons Apple Should Buy Nvidia - #5 It's All About Efficiency



November 29, 2010 – Comments (1) | RELATED TICKERS: AAPL , NVDA

The BlindCat is back in The City and on his way to the office.  TheBlindCat misses the days when the 1Train only loaded the first five cars at South Ferry, managed to get a seat today anyway so just enough time to write an intro:

Previously TheBlindCat posed the question Is Nvidia rising on takeover speculation?

Only one of the four potential suitors most commonly mentioned in the blogosphere resonates with the fortuitous feline.  Even if you did not read the previous post,  the title of this post probably makes it clear that the suitor is Apple (Nasdaq: AAPL).  Over the course of the next week or so TheBlindCat will attempt to provide five compelling reasons why the acquisition of NVIDIA (Nasdaq: NVDA) by Apple makes sense.

Reason #5 It's All About Efficiency

Apple has a long history of differentiating themselves from other
manufacturers with both hardware and software.  "What?", you say,
"Those days are long gone, Apple is now solidly in the X86 camp".  To
which TheBlindCat responds, "Not so fast ..."

The move away from RISC based PowerPC chips and towards CISC based
Intel chips was precipitated not by the need to compete based on clock frequency, rather on performance per watt basis.

"In his keynote address on June 6, 2005 at WWDC, Steve Jobs officially
stated that the reason for switching from PowerPC-based to Intel-based
systems was:

Because we want to make the best computers for our customers looking
forward. Now, I stood up here two years ago in front of you and I
promised you [a 3 GHz Power Macintosh G5], and we haven't been able to
deliver that to you yet. I think a lot of you would like a G5 in your
PowerBook and we haven't been able to deliver that to you yet. But
these aren't even the most important reasons. The most important
reasons are that as we look ahead, though we may have great products
right now, and we've got some great PowerPC product[s] still yet to
come, as we look ahead we can envision some amazing products we want
to build for you and we don't know how to build them with the future
PowerPC road map. And that's why we're going to do this. When we look
at Intel, they've got great performance, yes, but they've got
something else that's very important to us. Just as important as
performance, is power consumption. And the way we look at it is
performance per watt. For one watt of power how much performance do
you get? And when we look at the future road maps projected out in
mid-2006 and beyond, what we see is the PowerPC gives us sort of 15
units of performance per watt, but the Intel road map in the future
gives us 70, and so this tells us what we have to do.

Apples A4 is the next milestone in the quest for efficiency and is
accompanied by the acquisition of P.A. Semi and  Intrinsity which when combined with what Louis Gray terms "a 'Giant Sucking Sound' In the Valley'" shows just how serious Apple is in their quest for more performance per watt.

The recent spate of news regarding Chinese Super Computing and Hardware Accelerated Browsers, should provide a hint at what is missing from Apples list of acquisitions, GPU IP. Nvidia fills this role nicely both from hardware design and software development.

The hardware and software synergies each deserve their own bullet point and further elaboration over the coming week, so stay tuned!


1 Comments – Post Your Own

#1) On December 02, 2010 at 8:32 AM, TheBlindCat (49.73) wrote:

This is the first entry in a five part series that attempts to justify the conclusion reached in an earlier post  Is Nvidia rising on takeover speculation?

Part Two can be found here Top 5 Reasons Apple Should Buy Nvidia - #4 Apple is “A Mobile-Device Company”

Report this comment

Featured Broker Partners