Few things. kenjackson alluded to them 1. NC is using older generation parts (ex. their SoC is OMAP3621 which is at least two generations behind). This is off

Few things. kenjackson alluded to them 1. NC is using older generation parts (ex. their SoC is OMAP3621 which is at least two generations behind). This is off the shelf from Texas instruments who own the entire supply chain in design and foundry. Look at all the products using this technology -- http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 -- now you are looking at pretty decent volume and per unit cost. 2. 6 million vs 15.4 is not very meaningful in per unit cost difference since both volumes are pretty huge. This is not accounting for the fact that other companies could be using this SoC. Also, Apple does custom design for thier own products so Samsung cannot sell off their chips to someone else. So Apple has to invest in design and all the associated costs in the development and obsolescense of the chips. Given the tight margins it is not surprising Apple buys gross manufacturing capacity below forecasts and let shortages occur.