Nvidia Shield recall impacts 'vast majority' of tablets it sold, CEO says
Jen-Hsun Huang also says even with low sales of the tablet so far, Nvidia's in the hardware market for the long haul.
Nvidia's Shield tablet recall includes the "vast majority" of devices the company has sold, CEO Jen-Hsun Huang said.
Nvidia on Friday announced that 8-inch Shield tablets sold between July 2014 and July 2015 have a battery that is susceptible to overheating and could pose a fire hazard. The company said that no other Shield products, including the Shield Android TV set-top box and the Shield gaming portable, are part of the voluntary recall.
Those tablets with batteries codenamed B01 are not affected by the recall, but customers who own devices with Y01 batteries are affected. The US recall affects 83,000 Shield tablets sold in the States, according to the US Consumer Product Safety Commission. Another 5,000 recalled tablets were sold in Canada. That number encompassed most Shield tablets Nvidia has sold, Huang said.
"Ultimately it was a hard lesson in learning about battery suppliers and battery supply chain," Huang told CNET following Nvidia's second-quarter earnings report. "I guess at some level I'm glad we learned it at the beginning when our expectations for sales were rather modest and just getting into it."
Nvidia, which is best known for its line of graphics processors for computers, pitches the Shield tablet as a slate built for gamers. The Santa Clara, California-based company hasn't revealed how many devices it has sold, but most experts believe the number to be low. Consumers in general aren't buying as many tablets as they used to, and even Apple's iPad -- the king of the market -- has been struggling.
But Huang said even with low sales, Nvidia intends to stay in the device market for the long haul. The investment required to make a tablet is low, he said, and he believes being able to access games online will revolutionize gaming.
"How long are we going to be in this? A long time," Huang said. "I believe in Shield. I believe this is a very important investment for us. I have big, big, big dreams. But we started out with modest beginnings because we have to learn to walk before we run."
Nvidia rose to prominence by creating graphic processing units, or GPUs, for computers, and it continues to benefit from high demand for its graphics for PC gaming. But it also has looked for other avenues for growth as overall PC sales slow. It had sought to break into the smartphone and tabletbusiness, but has largely been shut out, and is now looking at gaming devices and cars as its next big opportunity.
Huang said big new games coming later this year -- such as "Star Wars" -- will boost demand for its GPUs. That helped Nvidia project stronger third-quarter sales than analysts anticipated. The company said it expects to report revenue of $1.18 billion, plus or minus 2 percent. Analysts polled by Thomson Reuters had projected sales of $1.1 billion.
Nvidia shares rose 9.8 percent to $22.45 in after-hours trading.
Sales from Nvidia's overall GPU business grew 9.2 percent from the previous year, while revenue from the GeForce GPUs for gaming jumped 51 percent. Sales from Tegra, Nvidia's mobile chip geared at automobiles and mobile devices, slumped 19 percent. The company said Tegra was hurt by the smartphone and tablet market, but the decline was partially offset in the automotive infotainment system market and Shield sales.
Overall, the company reported net income of $26 million, or 5 cents a share, down from $128 million, or 22 cents a share, in the year-ago period. The tablet recall lowered Nvidia's earnings by 2 cents a share. Excluding that and a 19-cent charge for winding down its Icera modem business, Nvidia's earnings climbed to 34 cents from 30 cents a year earlier. Analysts had expected earnings of 21 cents a share.
Revenue climbed 4.5 percent to $1.15 billion, above the $1.01 billion projected by analysts.
Featured Video
Apple Music snags 11 million trial users, but how many will pay to stay?
Yes, 11 million sounds like an impressive number, but Apple faces challenges in trying to achieve its reported goal of more than 100 million subscribers.
Apple Music has already grabbed 11 million trial users a little more than a month after its debut.
Eddy Cue, Apple's senior vice president of Internet software and services, revealed the 11 million figure in an interview with USA Today published Thursday, adding that "we're thrilled with the numbers so far."
Released on June 30 with the iOS 8.4 update to Apple's software for mobile devices, Apple Music is the company's response and rival to other music-streaming services, such as Spotify, Pandora and Rdio. Apple Music offers streaming music with playlists curated by "music experts," a 24/7 radio station called Beats 1 and a social feature called Connect that puts together musicians and their fans. Available as a free trial for the first three months, the service costs $9.99 per month for an individual plan and $14.99 for a shared family plan for up to six people.
Cue didn't shed any numbers on the individual plans but said that 2 million people have already subscribed to the more expensive family plan.
Apple Music is important to the company as a way of competing with Spotify and other services for a chunk of the increasingly popular music-streaming business. But it's also a way to bring more users into the Apple ecosystem. By offering its own music-streaming service for iOS devices, Apple hopes to sell more iPhones and iPads. Selling more iOS devices means more users who will buy items from iTunes and potentially other Apple products and services. And Apple already has around 800 million iTunes subscribers, all of whom are part of that huge ecosystem.
But among the 11 million people in the trial stage, how many will actually stick with Apple Music once they have to shell out a monthly fee? That depends in part on the music on hand, but also on the usability of the service. Still in its early stages, Apple Music has received some criticism from users, with complaints centering on matters such as misidentified songs and duplicate playlists.
Cue acknowledged the initial glitches, saying that "we're aware that some users have experienced some issues, and we hate letting them down, but we're releasing updates as fast as we can to address those issues."
Even assuming all 11 million people shelled out for a subscription, Apple Music's paid membership would be just over half of the 20 million people who pay for a Spotify account. And Spotify's ranks have been growing at a fast clip. In May 2014, Spotify had 10 million paid subscribers and 40 million active users. Those numbers jumped to 15 million paid and 60 million active by the end of last year. In addition to the 20 million paid subscribers, Spotify now has 75 million active users.
Beyond fixing the glitches in Apple Music and convincing trial users to subscribe, Apple needs to spread the word about its new service among the general public. The company is planning a wide marketing initiative using billboards, TV spots and radio ads to tout the service's ability to connect listeners with both established artists and up-and-comers, USA Today said. And to capture more than just iOS users, Apple is cooking up an Apple Music for Android service.
Apple reportedly has set a goal of winning over 100 million subscribers for Apple Music, a lofty one as that would be more than double the number of subscribers of all current music services combined, USA Today noted. Offering streaming music, a radio station and the Connect social feature all in one place, Apple Music can be confusing to navigate and use at first. But promoting and explaining the service is only one of the challenges Apple faces.
"For many people outside of the US (Apple Music launched in 100 countries), you still have to explain what it is and how it works," record producer and now Apple executive Jimmy Iovine told USA Today. "Beyond that, there's still the issue of winning over millennials, who never pay for music, by showing them you're offering something that will improve their lives. And finally, there are people out there who I think understand its value, but we still have to go out and get them."
Russ Crupnick, managing partner of research firm MusicWatch, said that the significance of the 11 million trial subscribers is a matter of perspective since the service is still in a free period. Apple Music is available in North and South America and Europe, as well as Russia and India, so the 11 million trial members seems relatively low. And it leaves Apple far short of its purported goal of 100 million members.
"But Spotify and Pandora didn't get there overnight either," Crupnick added.
No comments:
Post a Comment
Please leave a comment-- or suggestions, particularly of topics and places you'd like to see covered