Apple Switches Back To Nvidia Graphics For The New MacBook Pro

June 12th, 2012 by Trefis Team
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While the web has been abuzz for quite some time with rumors of Apple’s (NASDAQ:AAPL) new MacBook Pro featuring Nvidia’s (NASDAQ:NVDA) GPU, the same was confirmed with the introduction of a new lineup of MacBook notebooks at the Worldwide Developers Conference earlier this week. Apple updated its notebooks line with Intel‘s (NASDAQ:INTC) third-generation Ivy Bridge processors and, for its MacBook Pro, it switched from AMD’s (NYSE:AMD) Rodeon graphics chips to Nvidia’s (NASDAQ:NVDA) GeForce GT 650M graphics.

The move could be a huge win for Nvidia, whose discrete graphics division has been facing increasing threats since the introduction of integrated graphic solutions by AMD and Intel last year. (Read: Nvidia Graphics Chips In the New MacBook Pro Would Be a Huge Win) Though a switch-over to Nvidia’s graphics by Apple might not lead to significant growth in Nvidia’s discrete desktop business, it will certainly help the company defend its dominant market share.

Contributing close to 15% to our current price estimate of $21 for Nvidia, fending off growing competition from AMD in the discrete notebook graphics division will work well to the company’s overall valuation.

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See Our Complete Analysis for Nvidia Here

The next generation MacBook Pro boasts of higher energy-efficient performance with a 15-inch retina display, the highest resolution ever for a notebook and enhanced battery life. It is powered by Nvidia’s GeForce GT 650M notebook GPU based on the Kepler graphics architecture, which offers unparallelled performance and maximized power efficiency.

Positive Outlook For Products Based On Kepler Architecture

Nvidia launched its new Kepler GPU architecture in mid-March this year. The first Kepler product was the GeForce GTX 680, which is faster, smaller and more power efficient than its direct competitor. It is also the first architecture to include virtualization technology built right into the GPU. Nvidia claims that Kepler is the most efficient GPU architecture ever created by it and intends to roll out Kepler into each of its businesses, starting with desktops and notebooks.

The company refreshed its notebook GPUs top to bottom with the launch of GeForce 600M series and consequently witnessed  growth in this division last quarter. We have a positive outlook on the product cycle for Kepler architecture and believe that the strong revenue growth will continue in the current year as well, driven by Kepler design wins on the Ivy Bridge platform.

The 650M used in the MacBook Pro is a powerful chip, but Nvidia has other higher-end notebook graphics cards for Windows-based laptops in the market such as Samsung Series 7 that supports the GTX 675M graphic card and Origin EON15-S that includes the GTX 680M card.

We believe Nvidia has a strong portfolio of discrete notebook graphic processors which will help it retain its foothold in the market. At the same time, we think that the cut-throat competition with AMD might make market share gains for either player unsustainable in the long run. Hence we estimate Nvidia’s share in discrete notebook graphics will remain at the current level for the period under review.

We have a price estimate of $21.08 for Nvidia, a premium of around 70% to the current market price.

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