New ZTE smartphone completes Nvidia’s silicon loop

Nvidia(s nvda) has landed its first deal to provide both mobile connectivity and app processing for a single handset, revealing on Monday that ZTE is sourcing both its Tegra 2 processor and an Icera baseband chip for its new mid-range Android smartphone, the Mimosa X. One design win won’t turn Nvidia into a Qualcomm(s qcom) yet, but this deal is definitely a step in the right direction.

Before Nvidia bought Icera in mid-2011 it was stuck in the high-end of the apps processor market. That’s not a bad place to be, but without its own radio chipset business Nvidia couldn’t scale down into mid-tier hardware and eventually budget markets like competitors Qualcomm, Broadcom(s brcm) and ST-Ericsson(s STM)(s eric). Those vendors can produce integrated baseband-apps processors on a single chip cutting down on cost and power consumption. Icera gives Nvidia not only that integrated roadmap, but a compelling, programmable, low-power radio silicon platform.

Note that the Mimosa X won’t have such an integrated chipset. Instead ZTE is embedding the baseband and processor as separate components in the device. Nvidia won’t have true integrated silicon until 2013, when it plans to fully merge its connectivity and multimedia platforms in time for the large-scale launch of mass-market LTE smartphones.

Still, the fact that ZTE is buying all of a phone’s key processors from Nvidia is a good sign that Nvidia can scale its business down to that mass market. While we’re anticipating the first Tegra 3 smartphones at Mobile World Congress next week, the dual-core Tegra 2 is no slouch when it comes to high-end gaming and multimedia. The new ZTE smartphone will run Android 4.0 (Ice Cream Sandwich) and sports a 4.3 quarter-HD display, a 5 mexapixel main camera with HD recording capabilities and 4 GB of on-board storage. The handset will support HSPA+ up to 21 Mbps, but no LTE.

ZTE thrives in the mid-range and low-end device space, and the HSPA+ Mimosa X seems to fall right in that sweet spot. There’s no word on pricing, though initial buzz indicates ZTE will launch it at MWC, alongside two mid-tier LTE smartphones.