Nvidia's new gamer-focused Shield Tablet sports a lot of bells and whistles, but what it may be missing are potential buyers.
The Android tablet, which includes the company's powerful, 192-core Tegra K1 mobile processor, is the latest attempt by the Santa Clara, Calif., chipmaker to create its own hardware, rather than its mainstay of supplying chips to other devices. The $300 Shield Tablet includes an 8-inch, 1920X1200 full high-definition LCD display; front-facing stereo speakers; and a stylus. Users also can purchase a separate $60 wireless controller designed by Nvidia.
"This is a great companion to those gamers out there already," Matt Wuebbling, general manager for the Shield Tablet, told CNET News last week. "If they want a tablet, this is a perfect tablet for them."
But there's reason to be skeptical. Nvidia's push into the tablet business comes at a time when the market's growth has slowed dramatically. The new device falls in between two categories, lacking the brand awareness of premium tablets such as the Apple iPad or even Samsung Galaxy Tab S or the wallet-friendly price of Google's Nexus 7. It's unclear whether the gaming aspect of the Shield Tablet is enough to set it apart from the throngs of me-too products.
"I think they're on the right track," said Ben Bajarin, an analyst with Creative Strategies, "but overall tablet sales -- it's going to be a rough year."
The device joins Nvidia's $200 Shield handheld gaming system from last year, now renamed the Shield Portable. The family of devices marks an effort by Nvidia, known for its graphics chips, to expand beyond its traditional markets and interact directly with consumers. People continue to buy its graphics chips in large numbers, but that may not always be the case as the PC market slows and as rivals such as Intel and AMD improve the graphics they combine with their processors.
Nvidia's willingness to showcase the K1 processor in its own device comes at a time when it has lost its traction among tablet makers. Its chips were an early favorite of vendors, powering high-profile devices such as the Microsoft Surface RT and the Nexus 7, resulting in sky-high projections for the growth rate of the Tegra line. Those devices yielded mixed results, and rival processor maker Qualcomm has quickly supplanted Nvidia as the chipmaker of choice for many tablets.
Nvidia earlier this year said it would back away from pushing Tegra for mainstream smartphones and tablets. Rather, it would focus on automotive, gaming, and "segments of phones and tablets where computer graphics are really important," Nvidia CEO Jen-Hsun Huang told CNET News in May.
Nvidia isn't the only one feeling the pressure. Apple, which sells about a third of all tablets in the world, in April reported a disappointing number of iPad sales -- only 16.4 million units sold during the March quarter versus the 19 million expected by analysts and the 19.5 million sold in the year-earlier period. The company will release its latest iPad numbers Tuesday in its fiscal third-quarter report.
The same factors that hurt iPad sales could also impact Nvidia's new device. It's easy for people to pass older tablets to relatives or friends when they upgrade. People also don't have the two-year upgrade incentive that smartphones get from wireless carriers, and new models of tablets aren't changing enough to compel consumers to buy the latest versions. In addition, most people who crave a tablet likely already have one, and many consumers are forgoing tablets in favor of smartphones with bigger screens, dubbed phablets.
Then, of course, there's all the competition in the market. Apple's iPad, despite weaker sales, still sells better than any other tablet line on the market, four years after it was first introduced. Even more concerning are the dozens of new, inexpensive tablets that also run Google's Android mobile operating system. The Shield Tablet's pricing -- starting at $299 -- doesn't quite put the device in the budget category. And the tablet will only be available online, a problem for consumers who are used to trying out devices in places like Best Buy before purchasing them.
Overall, the tablet market has slowed. Tablet shipments in the first quarter dropped 36 percent sequentially and rose only 3.9 percent from a year ago, according to market tracker International Data Corp, who warned of a challenging year ahead.
Nvidia, for its part, believes there's still room in the tablet market for devices tailored to specific segments. Its Shield Tablet will target gamers, a customer base long loyal to the company and a group that has shown staying power in the otherwise shrinking PC market. While Nvidia has been expanding into the automotive and mobile segments, most of its revenue still comes from hardcore gamers buying graphics processing units, or GPUs, for their computers.
Still, the Google Play store, where Shield Tablet customers will download their games, lacks many of the big-budget franchise games -- such as Halo and Call of Duty -- that have drawn gamers to consoles for years. Though the Shield Tablet could provide game developers with incentives to come out with more complex games for mobile devices, the mobile-gaming ecosystem is still well behind consoles when it comes to splashy high-quality titles.
The new Shield device should benefit from the development of its predecessor, the Shield Portable. Since Shield Portable first launched, the Shield game catalog has tripled, with about 120 PC games available for streaming and about 180 Android games enabled for the Shield controller. It's unclear, however, how well the first Shield device has sold. Nvidia declined to disclose sales figures.
The price of the new tablet, though, is about as much as someone might pay for a console. At this point, it's hard to know just how many gamers are out there who are willing to fork over $400 to $500 for the newest console, plus an additional $400 for a 32GB, LTE-enabled Shield Tablet, $60 for a controller, and $40 for a cover. A 16GB, Wi-Fi version of the Shield Tablet is $300.
With the ability to handle up to four wireless controllers and a speedy graphics chip, the Shield Tablet certainly provides many similar capabilities to pricey gaming consoles such as Sony's PlayStation 4 or Microsoft's Xbox One. The device won't be replacing those consoles, but it will offer gamers some features they won't find in other tablets.
"We're not trying to go out and say, 'You should replace your PS4, put this there instead,'" Nvidia's Wuebbling said. "Absolutely not."
Patrick Moorhead, president of tech analyst firm Moor Insights & Strategy, said the new device likely won't become a mainstream device purchased in high volumes. But it could attract a number of gamers who are used to paying hundreds of dollars for GPUs.
"I do think that gamers are willing to pay that much money" when looking for a tablet, he said, though he added that the $300 Wi-Fi version is likely a more compelling price for buyers than the $400 LTE version.
Pre-orders start Tuesday, and the tablet will be available in the US on July 29, Europe in mid-August, and other regions in the fall.