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HEXUS.sharewatch: NVIDIA shares plummet – iPad 2 effect?

by Scott Bicheno on 7 March 2011, 13:27

Tags: Apple (NASDAQ:AAPL), NVIDIA (NASDAQ:NVDA)

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"Never in the field of tech conflict was so much damage done to so many companies by such a small launch," as Winston Churchill would likely have said were he still alive and a tech blogger rather than political leader.

The feeling around the web is unanimous: Apple didn't do that much with the launch of the iPad 2, and that was still enough to kick everyone else's ass.

The evidence of this consensus is apparent in the movement of tech stocks last week. By far the biggest loser was NVIDIA, which had seen its stock rise to its highest levels for three years on the back of the buzz around Honeycomb tablets at CES and MWC.

But the fickle market is now far less bullish about Android tablets after the launch of the iPad 2. If anything what impressed people most about the launch was that Apple didn't even seem to be trying. The general feeling now is that Apple owns the tablet market and can raise its game just as much as is necessary to swat the competition.

Given that the first wave of Honeycomb tablets all run NVIDIA's Tegra 2, any downer associated with them will be passed directly onto NVIDIA, and that's exactly what happened. Tegra 2 uses ARM's Cortex A9 CPU design, but so does the Apple A5, so ARM's not bothered who wins. Further evidence of the iPad 2 effect lies in Apple being one of the few tech stocks to rise last week.

 

Company Listing Share price 7/2/11 Share price 21/2/11 Share price 28/2/11 Share price 7/3/11 7-day change Market cap (bn)
AMD AMD 8.40 9.18 9.29 9.23 -0.6% 6.32
Apple AAPL 346.50 350.56 348.16 360.00 3.4% 331.66
ARM ARMH 29.45 30.48 30.11 29.24 -2.9% 13.10
Avnet AVT 36.92 36.97 34.49 34.18 -0.9% 5.22
Cisco CSCO 22.05 18.85 18.64 18.40 -1.3% 101.72
Dell DELL 13.89 15.43 15.13 15.60 3.1% 30.11
Google GOOG 610.98 630.08 610.04 600.62 -1.5% 193.11
HP HPQ 47.43 48.67 42.68 42.61 -0.2% 92.66
IBM IBM 164.00 164.84 162.28 161.83 -0.3% 197.36
Ingram Micro IM 20.48 20.39 19.98 20.05 0.4% 3.14
Intel INTC 21.68 22.14 21.86 21.56 -1.4% 118.32
Microsoft MSFT 27.77 27.06 26.55 25.95 -2.3% 218.06
Nokia NOK 11.06 9.19 8.65 8.49 -1.8% 31.79
Nvidia NVDA 25.67 25.63 23.12 20.75 -10.3% 12.06
Oracle ORCL 32.62 33.68 32.95 32.76 -0.6% 165.54
Qualcomm QCOM 55.23 59.19 59.02 58.15 -1.5% 95.58
Tech Data TECD 49.04 51.20 49.80 50.12 0.6% 2.34
Dow .DJI 12092.15 12391.25 12130.45 12169.88 0.3% N/A
FTSE 100 .FTSE 5997.38 6086.09 6001.20 5990.39 -0.2% N/A
NASDAQ .IXIC 2769.30 2833.95 2781.05 2784.67 0.1% N/A


HEXUS Forums :: 6 Comments

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Dell seems to be doing alright. Should I assume that this is incidental to the iPad2 launch?
hermano pequeño;2054100
Dell seems to be doing alright. Should I assume that this is incidental to the iPad2 launch?

Yeah, seems to be from an uplift in the corporate market and a few new deals for Dell in that area.

Dell doesn't really have much of a consumer tablet proposition and, for that matter, I don't expect HP/Palm to have a strong consumer presence either. The problem they've got is that the iPad is already pretty popular among CEOs…
Apple's worth ten Dells. Mad eh?
Apple don't make that much money from their PCs, the margins are quite small as they can't extort quite so much.

However on mobile phones they do, on iPods they do, on iTunes they do. The iPad is relatively small fry for them, accounting for less than 2% of IOS devices I read somewhere.

So given that context dell don't really compete, the sales of their personal highly portable devices are miserable.

Only Apple can put out a product with a massive hardware markup, and get people to act as if it has a purpose, dell can not do that instead they have to deal with business types who care about value for money first and foremost.

What is truely shocking to me, is how whilst Apple's end customers might be going through a recession, they are still buying iPads….. I would have not expected that at all.
Scott B;2054128
Apple's worth ten Dells. Mad eh?
Proof, if ever it were needed, that the market and reality are vastly distant entities.