Nvidia (NASDAQ: NVDA) purchased Icera for $367 million in 2011 it intended to enter the 4G LTE market to build a modem for its Tegra SoCs that would compete with Qualcomm (NASDAQ: QCOM). Now Nvidia has announced that it exiting this market entirely.
“The company purchased Icera in 2011 to engage the smartphone revolution with a leading integrated application processor and modem platform. Since then, the company has reshaped its strategy to focus on high-growth opportunities in gaming, automotive and cloud computing applications like deep learning, where its visual computing expertise is greatly valued,” Nvidia said in a blog post.
Part of this has to do with Nvidia’s overall shift for Tegra. Tegra has not found much success in the smartphone and tablet market, which led Nvidia’s CEO Jen-Hsun Huang to announce in May 2014 that Nvidia would no longer be pursuing wins in those sectors. Instead Nvidia would be pushing hard to target the automotive market, with Tegra powering the in-car entertainment systems for high-end cars. Nvidia has had some wins in this sector, but ultimately it would like Tegra to power self-driving cars — something that’s admittedly a ways out.
In the end the Icera division will likely be sold to one of Nvidia’s competitors that has already made serious gains in the baseband sector. Intel (NASDAQ: INTC) comes to mind, but there’s also MediaTek (TPE: 2454) which could definitely use the IP that Icera has in its library.