iPad A4 Chipset Cost Apple $1 Billion?

We typically don't run those stories about iPhone or iPad component costs anymore because they're just silly -- a couple of hundred dollars in metal parts per unit never takes into account R&D and marketing costs, and things like paying $1 billion for the new Apple A4 chipset in the iPad. Or so hints the New York Times:

At the same time, Apple, Nvidia and Qualcomm are designing their own takes on ARM-based mobile chips that will be made by the contract foundries. Even without the direct investment of a factory, it can cost these companies about $1 billion to create a smartphone chip from scratch.

And this would be for an ARM + PowerVR chipset assembly, how much will it cost when Apple starts spinning their own PA Semi designed chipsets whole? And what's the competitive advantage that they're willing to spend so much?

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.