Comment by protomyth | Hacker News Reader

Comment by protomyth | Hacker News Reader

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I am pretty sur iSuppli's numbers are not accurate. Apple has the money to buy in quantity that Mortorola cannot match. I also think that Apple's COO has overseen the building of a world-class supply chain. Plus having a successful retail chain that can feature your product is a huge advantage. The iPod experience shoul show that price is not going to be an easy thing to beat Apple in for consumer electronics.

So apple can buy the CPU for it's iPad from Samsung for less than Samsung can????

I doubt Samsung is that screwed up but I do know one company where outside vendors got a better price then one of their own divisions. The CPU is not the only component.

Actually, this is correct. In many electronics companies the divisions internally can operate as profit centers, wherein they are incentivized by making the largest profits for themselves. If Apple can offer more for flash to the Samsung flash division than the phone division at Samsung, then business goes to Apple.

The numbers check out.

Related readings

"Using transfer pricing in decision making - Nuts and Bolts of Business": http://bit.ly/f0xBb0

Managerial Accounting Transfer Pricing Lecture Notes, UIC: http://bit.ly/fhaoUM

Exactly. In large asian corporations which have their hands in a lot of different industries and spaces, different divisions often act and negotiate independently. This is so that no one division can bring the whole company down and other companies can maintain a level of trust with that division as a supplier, regardless of whether another division might be competing with those companies.

Failure to respect these divisions is one reason Sony failed in the consumer electronics space against the iPod. It allowed the entertainment and media side of the company to impose ATRAC copy protection and other kinds of DRM on the consumer electronics division of the company, which resulted in a much less compelling (compared to the iPod and other music players which used less draconian DRM measures) network walkman line of products.

I know that this wasn't your exact point, but apple does their own CPU's, IIRC. The A4 chips are the ARM arch. and are done in-house.

They're designed in-house, but Samsung manufactures them.

Though "designed" might give you the impression that they're materially different from the hummingbird based hardware that Samsung make for themselves and others when in reality the differences are slight and probably more like making a choice from a menu (e.g. selecting a different GPU) than stepping into the kitchen yourself.

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