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

From: Mark wolfmane at gmail.com
Date: Sat Jun 14 01:33:54 EEST 2008
On Fri, Jun 13, 2008 at 4:16 PM, Theodore Tso <tytso at mit.edu> wrote:
> On Fri, Jun 13, 2008 at 03:54:40PM -0600, Mark wrote:
>> 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
>> own.
> Your naiveté is touching.  You have no idea how expensive it is to
> design modern, highly complex chips, do you?  The manufacturing costs
> are only one part of it.  If you ignore the R&D costs, then sure, once
> the chip is designed, making your own is cheaper but the startup costs
> of doing your own design, even if you are going to amortize it over a
> very large number of device, will generally push the per-unit cost of
> a custom chip to becoming FAR more expensive than simply buying a CPU
> from Intel or AMD --- or a wifi chip from Broadcom or a Video chipset
> from Nvidia.
>                                        - Ted

So you're saying their R&D costs are less? Can you explain to me why that is?

Never mind, I'll tell you: because they're already in the business.
It's that first time gearing up that is so expensive, it's much less
so after that because you already have the infrastructure in place.
Given that two different companies are already making similar chips,
though, the costs are also similar, even for new generations.

I'll grant you that the first-time cost is more than for a successive
generation, but that's comparing apples to oranges. They obviously
started up and kept going and profitable, why should it be different
for someone else?

Your arguments defy all logic.


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