Nvidia rolled out its Tegra 2 processor by showing off its capabilities in an LG phone, but the company's real bet is on content and ARM architecture.

At the Consumer Electronics Show in Las Vegas, CEO Jen-Hsun Huang showed off the gaming and graphics capabilities of the Tegra 2, but he kept coming back to the role of content in stimulating demand - and the role of Flash animation in that vision. He also announced Nvidia's push into high-performance computing, using architecture designed by ARM.

The focus on flash and Android was a none-too-subtle dig at Apple, which has not supported Flash on the iPad and iPhone. Steve Jobs has said often that he sees flash as no longer necessary.

Huang noted Flash is used on thousands of Web sites and in a lot of Web advertising. To illustrate the point he showed what happens when Flash is disabled: Google Finance's stock charts didn't work. Flash compatibility is one of the most important things to the Web experience, he said. To underscore the point he introduced Adobe CEO Shantanu Narayen said 120 petabytes of video in flash have been downloaded from the Web.

Besides Flash, Nvidia is building a new set of processors based on ARM designs, in an initiative dubbed Project Denver. Huang said it was a way for ARM to expand its reach to servers, PCs and supercomputers, from its current stronghold in the mobile device market. He noted that the number of ARM processors sold has outstripped those based on the x86 architecture, though much of that is because ARM chips appear in mobile devices.

But the point was well taken: if mobile devices running Android are the future, then the x86's days are numbered and the standard will be ARM.

The Tegra 2's ability to offer console- and desktop-quality graphics and animation on a mobile device will be key to simulating demand for phones that Huang called superphones. These are phones that basically have nearly all the capability of a desktop machine.

He drew a parallel to the early PC market, in which faster PCs drove game developers to push the limits of the processors and created demand for even more speed and power. A similar phenomenon, he said, will happen in the phone market.

Another plus for the phone makers is that carriers are willing to subsidize them, and the higher-end phones bring in much more revenue per user. This is one of those weird markets where the most capable devices are more affordable, Huang said.

The current crop of 4G networks will play an important part in this. Kyle Malady, vice president of network and technology at Verizon, used the press conference as a chance to tout the company's LTE network. He noted that Nvidia and Verizon would be demonstrating a multiplayer online role playing game at the CES, using Verizon's LTE network as the carrier.

Nvidia's press conference was packed; so many reporters arrived that two of the demonstrations Huang tried - a display of a Wall Street Journal web page and the Skype application - failed because the local wireless networks were overloaded. Couldn't you leave me a little more bandwidth? he said.

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