- Apple (AAPL): Google needs to out-gun Apple in mobile computing -- smartphones and tablets.
- Microsoft (MSFT): Google needs to out-gun Microsoft in traditional PCs and gaming.
- Facebook (FB): Google needs to become the main alternative to Facebook in social networking.
AppleApple and the iPhone/iPad: At the annual Google i/o developer conference last week, the Android development leadership was on stage and answered questions from the very large audience. One question was -- and I am paraphrasing -- what Google considers the biggest opportunity for Android going forward? The answer from Google's Android engineering panel was that the GPU (graphical processing unit) has only recently been able to fully satisfactorily handle simply rendering the screen graphics. Now the challenge going forward is to find a use for the GPU to take on additional tasks, leaving the CPU to do fewer things. This follows a pattern we have just begun to see over the last year in supercomputing. If you look at the major scientific labs and research facilities -- from corporate to military -- you will see that more and more of them have suddenly starting adopting Nvidia GPUs as their source for massive computing power.
In this case, Google did not mention Nvidia's name. It is also clear, that in the near term, Google's main efforts in this field are bearing fruit with Qualcomm ( QCOM), which has the lion's share of the 2013 design wins with Google and its partners. However, in speaking with Google's engineers at i/o, I got the lurking feeling that their longer-term engineering efforts -- well beyond 2013, starting near the end of 2014 and building massively in 2015 -- could be geared to a new GPU chipset with massive, almost supercomputer-like, GPU processing power. This would be the chipset that follows Nvidia's Tegra 4, which just entered production. Such a dramatically more powerful chipset would be available from Nvidia probably in late 2014. It would have GPU processing power orders of magnitude greater than anything else in the market.
MicrosoftMicrosoft and the Xbox: Everyone knows that Microsoft is about to announce a new Xbox, based on fairly "standard" Windows 8.1, X86 architecture and an AMD chip. This would have been a huge deal... five to six years ago. Today, however, the world of gaming has moved on. Microsoft has sold only approximately 80 million Xboxes in the last decade, so in other words Microsoft has only as many subscribers here as Research In Motion's ( BBRY) BlackBerry. What happened? Well, the iPhone, iPad and Android -- that's what happened. Nowadays, gamers with need for performance, use PCs. These PCs are many times more powerful than a traditional Xbox-style gaming box. At the other side of the spectrum, the new mobile devices are far more convenient than something tethered via a wire to your TV.
The big question everyone has been asking is: How about an Android gaming device, that looks like a gaming controller, and can be used by itself or in conjunction with any PC or TV? Nvidia has answered this call with the Shield device. You can order it now, and it will ship in June. It's $349. It was prominently featured by Google at i/o this year. Consider this: The only thing Google otherwise had to show, was a Nexus version of the Samsung Galaxy S4.
Nvidia may already be supplying Google here, or it may be doing so in the future -- or never. What is for certain is that this has inspired many players in the social and photo fields to consider this approach. Facebook is of course the world's largest repository of photos. Instagram, which Facebook acquired a year ago, dominates its field. Much of what goes on at Facebook is about photos.
Conclusion No. 3: Google's innovative use of GPUs in cloud photo processing could lead to higher demand for Nvidia's GPU cloud servers. I wrote Nvidia Is to Intel What Salesforce Is to Oracle, on March 26 that Nvidia is three years into a six-year transformation from a PC gaming company to a mobile and GPU cloud services company. These latest indications from Google suggest that 2015 and 2016 have the potential to be breakout years for Nvidia in successfully completing this transition. At the time of publication the author was long GOOG, NVDA, FB, BRCM, QCOM, AAPL, BBRY, and short MSFT and AMD. Follow @antonwahlman This article was written by an independent contributor, separate from TheStreet's regular news coverage.