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Comment by wsxcde | Hacker News Reader

The unfortunate thing is that the hardware guys do all the hard work but the software guys make all the money. And that's the real reason why Google pays way more than Intel.

It's the likes of who Intel figure out how you can put a billion little things each with a few tens of atoms on a chip that somehow work together to produce a useful computing device. And then Apple finds a way to create a really pretty GUI and walk away with 90% of the profit in the Industry.

As a hardware guy, I always feel like this is somehow unfair.

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Processor hardware is technically as close to magic as I’ve found in the modern world. The science and logic required to make chips is simply breathtaking.

That said, processor hardware is a mature market, one that is so mature that it is starting to consolidate in major ways. Until a startup comes up with a chip that can solve current problems not solve able by a CPU/GPU/FPGA, profits will continue to accrue further up the stack to the software companies that are adding differentiated value.

It is partly due to the capital investment required to first achieve a competitive scale. Since microprocessor companies require such enormous investment, there are fewer large companies and startups to compete for talent.

In other words, the hardware labor market is closer to monopsony than the software one.

In addition, other things being equal, the closer one is to customers, the more leverage one has on pricing and terms. This is a major reason why Amazon, Google, and Apple are focusing on developing voice assistants and home devices.

> And then Apple finds a way to create a really pretty GUI

Isn't Apple designing most of its chips in house, these days, at least on mobile where the big money is at? I suppose Apple isn't building its own fabs, but describing them as 'software guys' seems a bit of a mischaracterization of the company, and how/why they make oodles of money (hell, their software has been pretty damn buggy of late anyways).

They do order up a custom SoC package that then is actually manufactured by TSMC or Samsung - but do you think they would have to cut the price of their phones if they had to use the standard chips that Samsung, HTC etc use?

I'd say no, they could charge nearly the same. Which means the complicated hardware is not the differentiator "killer app", the marketing around the custom OS and the ecosystem is.

(Which is also why they don't sell iOS or macOS to other hardware firms - the hardware is good, but the software is the USP.)

Nah, the hardware guys are cheap and treat employees, on average, worse. Intel has 60% profit margins. If only there were a way to use money to induce people you desire to have work for you to do so!

> The unfortunate thing is that the hardware guys do all the hard work but the software guys make all the money.

It also doesn't help that a hardware exit can be 5+ years in the making and take $10-20 million, minimum.

What VC will fund that when they can throw a couple million at a bunch of stupid 20-somethings, flog the hell out of them, and flip to Goobookazonsoft within 18-24 months?

The Apple guys and gals solve a problem that more people understand they have and less people offer good solutions to /shrug

it is unfair.

i'm a software guy thats worked with hardware guys for most of my career. us software guys will bitch and halt work for a month if the coffee is a little too cold.

and the hardware guys will sigh and put in another 6 months of dv to make sure the part works, and it does, and they'll have a beer and go home and maybe sleep in that weekend.

While a valid complaint, it's arguable that Apple has the best CPU team in the world right now and maybe even chip team.

Their single threaded performance is no joke, especially in such a small power and die envelope.

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