It is entirely true, actually. Intel can sell a processor with over 1 billion transistors (Itanium) for less than $250 and break even, even though instead they

It is entirely true, actually. Intel can sell a processor with over 1 billion transistors (Itanium) for less than $250 and break even, even though instead they sell it for thousands because it's appropriate to do so in Itanium's target market. IBM can't sell a CELL (no pun intended) for anywhere near that little without taking a loss. Of course, a more appropriate comparison to Itanium is POWER since it's aimed at the same market -- IBM charges upwards of $10k per socket compared to $2500 per socket, and yet IBM's hardware sales aren't by themselves profitable; most of IBM's revenues are from consulting, service, and software sales. (That was 60% before IBM acquired PWC Consulting from Price Waterhouse Coopers, drastically growing their consulting arm.) I realize that that is a somewhat extreme case, but it's illustrative of how much Intel's economy of scales impacts its prices relative to everyone else's.