Nvidia buys MediaQ and boards the fast train to handheld
Nvidia is buying MediaQ? Now that’s a good use for all
that dough Nvidia has had lying around. MediaQ has a line of controllers
for handhelds with a range of features for every class of handheld including
low-cost parts that enable video and MP3 playback. In addition, the
company has just introduced the MQ9000 line, codenamed Katana, an SOC
that combines ARM processor, graphics processing, video, and Java processing
to take on mighty Intel, TI, and ST. Even more impressive, the company
has delivered on their promises time after time.
The cell phone market is already huge
It’s just as important sometimes to see what a company
does when it has a setback, and MediaQ weathered a big one a couple
of years ago when Infineon, a fab cut them off. MediaQ managed to satisfy
their commitments with the last of the Infineon parts coming off the
line and switched fabs (they are working with UMC), and they introduced
a new part for an even ASPs and new customers.
Nvidia has been planning to build a chip for handhelds
for some time, but their competitors probably didn’t lose too much sleep
over it. How could Nvidia, a company with a genius for building big,
powerful processors, scale down to the requirements of the handheld
market? ATI has had the Imageon chip in the market for a couple of years
now and it’s just now making headway. How can Nvidia catch up?
Well, now we know how Nvidia is going to catch up in the
handheld market—by buying the company that is, it can be argued,
the top contender in the market. The company already has major wins
in the market. In PDAs they have the Sony Clie (although Sony has announced
plans to build their own processor) and also products from HP and Toshiba.
MediaQ is also well positioned in the telephone hand-set with wins in
Japan that ATI can only dream about. With this acquisition, Nvidia has
leapfrogged ATI. And there are a lot of people losing sleep all over
Okay, so here’s the part we don’t get. Aside from
$70 million and one hell of a powerful parent company, what’s in it
for MediaQ? MediaQ’s revenues are estimated to be in the range of $30
million, and the company expects to grow quickly as features such as
video come into wide demand. And MediaQ stands at the ready with a part
that can compete very effectively against higher priced options from
Intel and TI and head to head with Epson—MediaQ’s most direct and
most viable competitor in the market. MediaQ is very well positioned
to go public and could have expected a much bigger infusion of cash
than it gets from Nvidia. The advantage, looked at from here, seems
to be all on Nvidia’s side.
The merger certainly makes good sense in the industry,
and one place it makes spectacular good sense is in the wild blue yonder
of handheld gaming. There is big promise here. Nokia is putting the
full force of its resources into N-Gage, Nintendo has been supported
during lean times by GameBoy, and Tapwave’s new machine, code-named
Helix (and sporting an ATI chip), is on the way and so is the potential
killer shark in the water, Sony and the PSP. Furthermore, what if the
thing plays video as well as games? How ’bout MP3? Messaging?
There are challenges here as well, and those too are
all on the Nvidia side. Will the company stand back and let MediaQ do
what they’ve already proven they can do? Can it continue MediaQ’s marvelous
record of meeting its customers’ requirements and its internal goals?
This is a field we’ve been covering with increasing frequency.
It’s pretty obvious why.