“boldly turning itself into a vibrant GPU compute and cell phone chip giant.”
The problem is they have already lost in the cellphone market. PowerVR pretty much rule that with parts far in advance of Nvidia.
Tegra requires friends in that space, nVidia seem to make it a mission not to make business friends for some reason.
ARM's Mali is also in that space, although Mali takes the same strategy as AMD's GPUs. So it's not all Imagination Technologies' way.
Thought I'd link in our previous discussions:
http://forums.overclockers.co.uk/showthread.php?t=18062521
http://forums.overclockers.co.uk/showthread.php?t=18062149
The problem is cashflow. Companies can have great revenue potential but unless they can collect that money in a timely manner to cover their costs then they could hit the wall - banks aren't happy to loan to companies at the moment to cover 'gaps'.
I doubt there's much in terms of direct sales of high-end GPUs if the costs making them are so high. They need to be seen to be a leader in the GPU market - that's their core company competence. It's also the same competence that they need to hit the super-"compute" and high end mobile markets.
To me nVidia are in transition - they need their revenue from their existing market to pay whilst they build momentum and gain market share in their new markets. The really need the cash flow but also they need their limited resources for producing the products to fit into those new compute markets asap or they'll lose the window of opportunity before the others move in - at which point if they can't get cash from that market it's game over.
nVidia do have strengths - they have hardware building expertise including chipsets, the vision to push being bleeding edge. However bleeding edge is high risk and needs cashflow like everything else.
If the 2xx series is dropped they're obviously deciding to put everything into focusing on that window of opportunity so they need the extra production capacity.
It also shows that the 58xx is making the 2xx sales painful.. perhaps the 2xx are actually loss makers.