Apple A4 chip

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?