[maemo-users] Nokia: Linux Needs to Learn Business

From: Theodore Tso tytso at mit.edu
Date: Fri Jun 13 23:02:53 EEST 2008
On Fri, Jun 13, 2008 at 01:01:51PM -0600, Mark wrote:
> Nokia has the resources to develop its own chips, which it could
> easily keep open. That would solve the problems for everybody (meaning
> consumers, developers and Nokia).

Many companies can *afford* to build and design new chips from
scratch, yes --- but unfortunately companies are not charities.  The
question is can you create a credible business plan where a single
company (and I don't care whether it is Nokia, Lenovoa, Dell, or
anyone else) or maybe a consortium of companies, produces a new
multi-function wireless chip that does 3G, Wifi, and everything else,
and at the very least breaks even compared with the cost of buying
that same component from Broadcom, or whatever supplier they might
happen to have.

Remember, the mobile business is a highly competitive one, and if it
costs an extra $20 per handset, that company will be hugely
disadvantaged when they try to get carriers to pick up their phones
(at least in the US market, where 99% of cell phones are sold through

And if you think someone is going to put down a huge capital
investment just to create an open chipset for the relatively small
internet tablet market, and do it in a way that won't lose vast
amounts of money, you're *really* smoking something pretty good.

> But they're not doing it out of fear
> of backlash from the closed community. Heaven help the company that
> sticks its neck out and breaks the industry wide open for *real*
> innovation...

I don't think it has anything to do with that at all.  It's about a
creating valid business plan where it at least breaks even, especially
since the number of people that would actually pay extra for open
device drivers is very small.  I happen to be one of them, but I
*know* that I am in the minority.

It's just like in the airline business, where people will kvetch about
comfort, and lack of hot food in economy class, but where time and
time again, it has been proven that when it comes down to deciding
whether to fly with airline X or airline Y, the vast majority of
customers overwhelmingly go with whatever is cheapest.

If you think you're so smart, and can figure a way to make money while
"breaking the industry wide open", I can certainly introduce you to a
few VC's (and VC's are really good at shredding six business plans
before breakfast --- well, at least during multiple breakfast meetings.  :-)

       		     	      	    	       - Ted

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