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

From: Theodore Tso tytso at mit.edu
Date: Sat Jun 14 00:36:20 EEST 2008
On Fri, Jun 13, 2008 at 02:44:01PM -0600, Mark wrote:
> What you're talking about is "outsourcing", which contrary to popular
> misconception is NOT cheaper than doing things in-house. EVER. What
> outsourcing allows unethical management to do is to hide some of the
> costs elsewhere, and have fewer employees to answer to.

No, it's not the same as "outsourcing".  I'm talking about the
physical components such as the chips that provide the Wifi, GSM/3G
functionality, etc.  Companies make "buy" vs "build" decisions all the
time.  It is very often NOT cheaper to make your own chips; why do you
think a laptop manufacturer buys video chips from Intel, Nvidia, ATI,
etc., and Wifi chips from Broadcom and Atheros, and so on?

And while you can choose to build a laptop with devices that all have
open source drivers thanks to company like Intel (although you may
sacrifice some 3-D graphics performance as a result), life is not so
simple in the mobile space, where cell radios are a bit more
specialized, and where low power requirements are far more stringent.  

> Again with the myth that it's cheaper to buy somebody else's product
> than to manufacture your own. How can you possibly believe that it's
> possible for one company to manufacture a given product for less, when
> they all have the same resources at their disposal? How gullible can
> you be?

Because they have expertise you don't?  Because they manufacture their
chipset and sell to multiple customers, so they can amortize their
costs across a much larger volume of unit sales?  Because they may
have access to certaint patents you don't have?  There are many good
reasons; the best counter example is that all PC manufacturers find it
cheaper to buy their CPU chips from Intel and AMD instead of making
their own from scratch.  Do you really think it is OBVIOUS that it is
always cheaper to make your own and never to buy from another
company's product?  Why is it that Dell doesnt make their own CPU
chips, then?

							- Ted

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