Rumor: NVIDIA Building iPhone and iPad Competitors

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NVIDIA (NASDAQ: NVDA ) has already confirmed its plans to develop an Android-based handheld gaming device. Now the company is rumored to be interested in manufacturing smartphones and tablets for other corporations. According to DroidGamers (which translated a report by Russian tech site Mobile Review ), NVIDIA is investigating the possibility of producing smartphones and tablets as a so-called "white-label" manufacturer. White-label companies typically produce items for one or more partners, who then place their own names on the box.

If the report is accurate, NVIDIA hopes to begin the design and manufacturing process by May or June, leading to a fall or winter ship date.

It is not yet known which companies may be interested in buying NVIDIA's creations.

Another option could be lesser-known Chinese corporations that are trying to break into the global market. They could use the NVIDIA name -- which would likely be highlighted in some capacity -- to bolster their own brands.

GameStop (NYSE: GME ) could also provide NVIDIA with some interesting opportunities. The retailer intended to break into the tablet business by applying the GameStop brand to an existing device. Those plans did not pan out, however, as the company decided to sell refurbished tablets instead.

Without a key partner (or several partners) that want NVIDIA's items, it is unclear how the company may proceed with this venture. NVIDIA could simply push ahead and send the items straight to retail.

Until the company has produced an actual device, it is difficult to say how well it could perform. However, there is no denying that tablets and smartphones are two of the toughest industries in technology. Apple (NASDAQ: AAPL ) has already taken a large part of the tablet market with the iPad and the iPad Mini. The two devices have sold more than 120 million units worldwide. With so many other corporations already fighting for the remaining market share, NVIDIA might find that it is impossible to compete.

The same could be said for the smartphone industry, which is arguably the most crowded in the world. In both cases, NVIDIA is faced with a series of obstacles it may not be able to overcome.

Follow me @LouisBedigianBZ

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This article appears in: Investing , Investing Ideas

Referenced Stocks: AAPL , BBY , GME , NVDA , S

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