This morning I awoke to something I never thought I’d see. It was an email message, but what it contained was so rare I thought I had to share it with you.
Yesterday I published a story here on the teardown analysis by IHS iSuppli of Amazon’s Kindle Fire tablet. And as you may remember, the story related how, in the opinion of its analysts, it cost $201.70 to buy the parts and assemble the device, which is only slightly above its $199 retail price.
The other big news was how dominant the chipmaker Texas Instruments is among the suppliers. Its applications processor chip, wireless chips, audio and power management chips add up to about $25, or about 12 percent of the bill of materials or BOM, which is the aggregate cost of all the components. It’s a pretty solid victory for TI in the competitive tablet field, where, outside of Apple’s iPad, success has been rare.
Naturally I asked Texas Instruments for a comment about this, and expected none. I’ve been writing teardown stories for six years (here’s the first I ever did) and never once has the manufacturer of the device in question nor any of its suppliers given anything more than a “no comment.”
Manufacturers tend to hate teardowns because they’re invasive. Take a product apart and you find out who a company is working with, and you learn a lot about how they see things. With the Kindle Fire, for example, we learned that Amazon deliberately took a “less is more” approach to keep costs down and thus minimize its loss and pave the way to eventually selling the device at a profit.
Suppliers hate teardowns too. There is nothing more secret, nor more interesting to know, than what company is supplying a manufacturer with a key component. Companies can rise or fall on strategic relationship with someone like Apple, or HP, or in this case Amazon. The first iPod, for example, put an otherwise unknown company named PortalPlayer on the map. That was until Apple replaced its chips with something else. Now that company is part of Nvidia.
Usually these suppliers are unwilling to rock the boat, and usually they’re covered by non-disclosure agreements. So when I do the typical reporter thing and call them for a comment after a teardown clearly shows their chip or display or other component inside the product, the supplier always, 100 percent of the time, without exception says, “No comment.” Probably they’d like nothing more than to brag about how their chip makes this or that product do amazing things, but usually they just can’t, won’t, and just don’t say a word.
Until today. Today, in response to my questions yesterday, I got a comment from Texas Instruments. And the fact that I did, meant I just had to share it. Here it is courtesy of a company spokeswoman:
“We can confirm that TI’s OMAP4430 processor and WiLink 6.0 connectivity combo solution are inside of the Kindle Fire….TI is thrilled to be a part of the Amazon Kindle Fire, which boasts powerful performance and engaging consumer experiences that are sure to make it a coveted device this holiday season.”