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

From: Mark wolfmane at gmail.com
Date: Sat Jun 14 00:54:40 EEST 2008
On Fri, Jun 13, 2008 at 3:36 PM, Theodore Tso <tytso at mit.edu> wrote:
> 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;

No, not for large companies of equivalent size and financial
resources. If you want to compare apples and oranges between a Dell
and some local mom & pop computer store, then obviously the local
doesn't have the resources to manufacture their own *anything*.
However, Nokia isn't even close to being in that boat.

> 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?

Because, at least for the initial product, it's faster. There's also
the matter of compatibility, because as yet no company has taken that
step of creating an open product for which *anyone*, anywhere can
create drivers, software, and apps. They simply don't want to take the
risk of introducing a competing standard, even though there really
would be no risk. It would be a sure-fire winner.

> 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;

None of those are counterarguments; in fact, they are all the reasons
*for* developing your own hardware. All of your arguments assume that
open products can't be manufactured, marketed and sold the same way as
closed products, which is absurd.

> 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.

Except they are doing that for reasons of compatibility (and upholding
the status quo), not because it's cheaper or because they are
incapable of manufacturing their own chips.

>  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?

Because it *is* obvious. The fundamental assumption is that the given
company has the size and resources to manufacture chips. Give that
capability, yes, it is *always* cheaper for them to manufacture their

> Why is it that Dell doesnt make their own CPU
> chips, then?

Because they've long been supporters of "Wintel", and in case you
haven't noticed, they aren't exactly the model business of late.
They've slipped considerably from their former success, and it's all
because of outsourcing and proprietary hardware.


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