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Comment by lebrad | Hacker News Reader

Qualcomm doesn't build faster chips because their customers have thin margins and want SoCs optimized for cost rather than speed.

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Agreed. If you look at A11, a huge portion of the chip is cache. 8MB L2 IIRC. The belief is that they (Apple) take a hit on the CPU and make it up in the full device. Can't do that if you don't make the full device.

(Just my personal opinion)

Well there are ARM laptops that cost 500$, and they're still not super fast.

And most of them are using even cheaper Rockchip SoCs. But that makes sense. $500 laptops don't seem like they would be high margin.

This seems reasonable, but whenever I see a cost breakdown of iPhones the CPU doesn't seem ridiculously expensive. Not sure if the cost breakdowns are wrong or what.

Yea I don't see how anyone can come up with an accurate cost for Apple's custom chips. I think what actually happens is that the analysts just say "Qualcom's chip costs $30 so Apple's is probably about the same."

The die size is known because the chips get decapped, the cost per square mm of silicon is known, the packaging and test costs are known, sure they have to estimate Apple's volume discount, but in terms of the physical chip itself pretty much all the bases are covered.

qualcomm benefits from having one of the first, and continue to have integrated LTE modem.

that is an additional cost on iphone if you are comparing cpu to cpu pricing (which there isnt really any details on the A11 costs).

not sure what the LTE and wifi modem costs on iphone, but its included cost with qualcomm cpu

Actually it's pretty easy, just take the die size and punch it in to the 300mm wafer calculator, estimate the yield, use the going estimate for TSMC wafers, and you have your number (very accurate also).

Do the flagship phones have thin margins? The S8, N8, Pixel, LG30?? I don't think so. The lower end Android devices do, but they will not be using this chip.

Flagship Androids definitely have low margins (relative to iPhones). Largely because of a lack of vertical integration and the need to compete against other brands in a heavily saturated market.

Only if you count the marketing budget. Samsung is highly vertically integrated, even more so than Apple. Paradoxically, the reason why flagship Android devices are as expensive as they are is to give the appearance that they are the same class of device as an iPhone. Price signalling is very important in the "flagship" segment.

A "Note 8" likely costs Samsung less to produce than the Mix 2 does to Xiaomi (Xiaomi does not own factories or component suppliers unlike Samsung), and yet the Mix 2 sells for about 2/3rds what the Note 8 does. The rest is profit for Samsung. Though of course since Samsung is a conglomerate, the profit is distributed across multiple business units.

No, and anyone who suggests otherwise doesn't know what they're talking about. Flagship phones are where the money is.

High end android phones that use Qualcomm chips are closing in on $1,000. Pixel 2 XL, Samsung Note 8, Samsung S8, etc. Iphones and high end Android phones are priced pretty similarly.

Right, high cost is not mutually exclusive of having thin margins.

> Right, high cost is not mutually exclusive of having thin margins.

Logically yes but what is Apple's benefit besides perhaps supply chain (being able to get components for cheaper because they know they need x million of them)? By that metric, how far behind can Samsung Galaxy line be? Why does Apple command a higher margin than a similarly priced Samsung Galaxy device? (Lets leave Pixel aside because they are likely two orders of magnitude below in terms of units sold)

It's also kinda hard to get a grasp on what "faster" means here. Some benchmarks clearly show a significant lead for Apple, but real world tasks on each chipset are comparable, if not Qualcomm-favourable, if comparing "equivalent" applications on iOS and Android. If Android could be installed (and properly integrated) on (recent) iPhones and iPads, then we'd have a fair comparison to draw I guess.

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