What will they be selling? Oh, you know, Apple products such as the iPhone, iPod and iMac as well as stuff such as the Playstation 3, Vaio notebooks, the Kindle, Nokia phones and the Wii.

Apparently, Foxconn will use the huge retail presence in China to get even more manufacturing business. Get your gear made by Foxconn, the argument will go, and you'll automatically get a foothold in the Chinese retail market.

We'll see how it goes. Let's just hope Foxconn uses all this money they're making to treat their employees a bit better. [ChinaDaily via TechCrunch]

The new method, called Electron Beam Freeform Fabrication (EBF3), uses the electron beam to melt raw material inside a vacuum. The beam can create any mechanical part you want for a small fraction of the cost of previous methods:

Normally an aircraft builder might start with a 6,000-pound block of titanium and machine it down to a 300-pound part, leaving 5,700 pounds of material that needs to be recycled and using several thousand gallons of cutting fluid used in the process.

With EBF3 you can build up the same part using only 350 pounds of titanium and machine away just 50 pounds to get the part into its final configuration. And the EBF3 process uses much less electricity to create the same part.

NASA says that this method will not only help aircraft manufacturers on Earth, but also astronauts, who may one day use it to make replacing parts during missions in remote bases. [NASA]

If these figures are correct, that would mean Sony could significantly drop the price of the console and remain profitable. Whether they would actually pull the trigger now remains to be seen, but it seems like the smart move to gain some ground on Microsoft and Nintendo. [Sony via TVG and VG247 via Kotaku]

iSuppli also noted that the 3GS hardware set is fairly similar to the 3G (with the exception of the new features) which helps to keep the costs down. However, they did note that there were some interesting changes with regard to component selection this time around.

iPhone 3G S Carries $178.96 BOM and Manufacturing Cost, iSuppli Teardown Reveals

El Segundo, Calif., June 24, 2009-With the new iPhone 3G S's Bill of Materials (BOM) and feature set nearly the same as the previous model in the iPhone line, you might think the product's component selection would be virtually unchanged. However, a dissection conducted by iSuppli Corp.'s Teardown Analysis Service reveals some interesting changes in the parts and suppliers.
"The entry-level, 16Gbyte version of Apple Inc.'s new iPhone 3G S carries a BOM cost of $172.46 and a manufacturing expense of $6.50, for a total of $178.96," said Andrew Rassweiler, director and principal analyst, teardown services, for iSuppli. "This is slightly higher than iSuppli's estimate of $174.33 for the original low-end 8Gbyte iPhone 3G based on pricing in July 2008. Although the retail price of the 16Gbyte iPhone 3G S is $199, the same as for the 8Gbyte version of the original iPhone 3G, the actual price of the phone paid by the service provider is considerably higher, reflecting the common wireless industry practice of subsidizing the upfront cost of a mobile phone and then making a profit on subscriptions."
The attached table presents a summary of the major component cost drivers in the iPhone 3G S.
The table and cost data presented in this article consist only of the iPhone 3G S's BOM. The total does not include other costs, including software development, shipping and distribution, packaging, royalty fees and miscellaneous accessories included with each phone.

This year's model
Beyond faster performance, the iPhone 3G S differentiates itself from the original 3G with the addition of video capture, an autofocus 3-Megapixel camera-compared to 2 Megapixels before-and a built-in digital compass. Besides these extras, the 3G S hardware feature set is not much different from that of the 3G.
"From a component and design perspective, there's also a great deal of similarity between the 3G and the 3G S. By leveraging this commonality to optimize materials costs, and taking advantage of price erosion in the electronic component marketplace, Apple can provide a higher-performing product with more memory and features at only a slightly higher materials and manufacturing cost," Rassweiler said. "Nonetheless, there are a few key differences in component selection compared to the iPhone 3G introduced a year ago."

Broadcom and Dialog dial in to iPhone
One of the more noteworthy changes in hardware is the use of a Broadcom Corp. single-chip Bluetooth/FM/WLAN device, costing $5.95. This represents the ongoing industry trend of moving to higher levels of integration, by putting all of these functions into one chip. Previously, to implement these functions, the 3G employed two devices: a Marvell Technology Group Ltd. WLAN chip and a Cambridge Silicon Radio (CSR) Bluetooth Integrated Circuit (IC).
Making its debut in the iPhone line is Dialog Semiconductor with its power management IC serving the 3G S's applications processor. At an estimated cost of $1.30, the Dialog chip replaces a corresponding NXP Semiconductors device in the 3G.

STMicroelectronics and AKM find way into 3G S
To implement the digital compass feature, the iPhone 3G S adds AKM Semiconductor Inc.'s electronic compass and STMicroelectronics' accelerometer, both of which are 3-axis devices. The STMicroelectronics part allows the 3G S to determine device orientation or inclination, while the AKM sensor detects device movement relative to magnetic north, supporting the 3G S's capability to reorient a map displayed on the screen to correspond with the direction the user is facing.

Infineon and TriQuint hold down the fort
Prior the 3G S introduction, speculation was rife that Qualcomm Inc. might displace Infineon Technologies AG as the supplier of the phone's critical baseband chip. However, Infineon has held onto this critical spot with its PMB8878 baseband chip, which accounts for $13 of the 3G S component costs. Similarly, TriQuint has kept its slot as the 3G power amplifier module supplier, supporting the tri-band HSPA functionality of the phone.

Major cost drivers
Toshiba Corp. scored the biggest single design win in the 3G S, with its 16Gbyte Multilevel-Cell (MLC) NAND flash costing $24. With the price of NAND flash having risen in recent months due to supply constraints, this represents a lucrative design win for Toshiba. However, while Toshiba was the supplier of the NAND in the specific 3G S torn down by iSuppli, the part is available from other sources that Apple is likely to use, most notably Samsung Electronics Co. Ltd.
Samsung also maintained its position as iPhone's applications processor supplier. Priced at $14.46, the applications processor is the fourth most costly component in the iPhone 3G S after the NAND flash, the display module and the touch-screen assembly.
The applications processor plays a key role in the 3G S's faster performance. In the 3G, the processor used an ARM RISC microprocessor with 400MHz clock speed; the 3G S employs a 600MHz version.

[iSuppli Image: iPhone 3GS Dissection]

E Ink Display (by E Ink)
$60

EVDO (by Novatel)
$39.50

Baseband Processor (by Qualcomm)
$13.18

8-Layer Printed Circuit Board (by Multek)
$9.83

532MHz Multimedia Application Processor (by Freescale Semiconductor)
$8.64

Battery (by LICO Tech)
$7.50

Main Enclosure
$4.45

(Interestingly enough, the main enclosure costs more than the than the RAM or Flash storage.) Keep in mind that this price excludes Amazon's costs for EVDO service, along with the standard R&D, shipping, yada, yada. [iSuppli]

A site called So_Many_A_Second explores the simple idea of showing us what X somethings per second looks like through a simple but effective flash animation.

Our lead image is a still grab of what the world's 27 cellphones produced per second looks like, but the site offers us a few other examples (like cars produced and computers sold), plus you can enter your own data for unique visualizations.

It's pretty much the perfect reason to pad an extra five minutes into your lunch break. [So_Many_A_Second via VSL]

Used to be, diving into a whole new product line was something only for the crazy ones, those who live dangerously, the mavericks. "Wise men wait to buy" was the refrain that rang through the web, with fear of hardware defects and half-baked features tempering the go! go! buy! buy! fever of a new product announcement.

But things are different now.

Manufacturing is Getting Really Good
Whether it's a unibody carved out of a single block of aluminum or a smaller, more efficient and reliable die for a game-console processor, manufacturing is getting better. Across the board. Mark Kotkin, the head of survey research at Consumer Reports, says that on the whole, reliability is higher and frequency of repairs is lower than they ever have been for the major brands. In the repair department, two of the least problematic major electronics are LCD and plasma flat screens, a shocker given the fact that they are two of the newest product types at the store.

Put simply, companies have tons of incentive to make their manufacturing process better, incentives that aren't directly related to making customers happy. If manufacturing is simpler and has more quality control, more product gets out the door, reducing throwaways and padding the bottom line with less cost (ergo more profit). That's nothing shocking—manufacturing gets better as tech gets more advanced. But because there's a built-in financial incentive for this to happen, it's a factor that won't be ignored, even—or especially—when cashflow is tight.

Software Updates Are More Powerful Than Ever
Gone are the days when every piece of home electronics comes with a different set of core parts. Today, our gear is more defined by the software that's running inside. And while no amount of firmware patching or OS upgrading will affect a melted solder point on a GPU or a warped laptop lid that won't close evenly, software updates bring serious enhancements down the pipe. Even gadget novices know enough to stick flash drives into their TVs to get improved HDMI performance when the situation arises, or anxiously pounce on new updates for game consoles with the hope of a fix or a free new feature.

Apple may control updates to the Nvidia GPUs in the new MacBooks, but knowing they are officially upgradeable via software—to allow for all kinds of goodies, like 8GB of RAM, dynamic dual-GPU cycling, and the like—is a buying incentive.

Some phones have it even easier, getting updated over the air. The G1 wasn't even fully released yet when we caught wind of the first OTA update coming down the pipe, and within a few hours of going open source, bugs were already being filed and fixed in the main Android stack by outside developers.

And back when we said wait on the iPhone? We were proven 100% right, as we watched it come fully into its own, at long last, with the 2.1 software. But because it was a free firmware update for all iPhones including the first-gen EDGE models, early adopters who didn't heed our warning still benefited from the massive revamp.

Microsoft showed similar goodwill by letting its major Zune updates trickle down the entire line, the latest update giving it a song recommendation engine that bests the iPod's.

Software upgrades are not always advantageous—recent iPhone and PlayStation firmware releases are crowning examples. But what's broken in software can be fixed in software, and when the breaks are egregious, the fixes usually come fast.

Internet Bitching is a Powerful Force
It's hard to make over a million of something and not have a few duds slip through QA—that fact will never change. Even though Apple claims that the Brick process is so simple that they "can get it right every single time," there will always be anomalies. (Humans, after all, are still involved.) A quick scan of Apple Discussions right now shows people complaining about slightly tilted function keys—the solution offered? pull up on the sunken end slightly with a prying tool.

This level of minutiae is there because now, complaining about product defects on the Internet actually gets results, and major companies are shifting their strategies because of that. Not previously known for warm fuzzy customer relations, Dell was forced to take action after increasing unreliability (and the company's tight-lipped or non-existent response) threatened to bring the whole ship down. The reaction? They created the Direct2Dell blog and IdeaStorm feedback site. Now only days after a story with unaddressed hardware issues hits Digg's front page (bad battery life, 3G reception, and on), a recall notice or firmware update goes public. Companies are learning a fundamental lesson: Having thousands of angry product owners unite on Digg to flame your defective hardware is not good.

My favorite example was Creative's unfortunate suppression of an unofficial driver—written by a totally random guy in Brazil—that gave the company's sound cards the Vista-friendly capabilities Creative itself was too lazy or distracted to publish itself. After nearly 2500 diggs later and plenty of posts from us and others, Creative finally realized it was being foolish. That's the power of internet bitching.

Even When You Wait, You Can Still Get Screwed
The first point here was unsurprising—tech manufacturing is more reliable than ever. But maybe you were thinking, "That sure wasn't the case with Nvidia's massive GPU recall." True, but the weird thing about that was that the product had been in production a long time before the defect was discovered. It affected everything from Dell laptops to MacBook Pros, many products that had already stood the test of time. In these cases, when a widely used component is at fault, even waiting for a product refresh wouldn't have saved you any trouble.

Reputations Are Important
You can also greatly increase your chances with a first-gen product by being smart about who you buy it from. While this theorem could be pretty safely applied to new products from Dell and Apple, for instance, buying a brand new form factor from someone with a less than stellar repair record—Consumer Reports' latest survey ranks Gateway worst for desktops and HP at the bottom for notebooks—may be something to think twice about. Just because a company is huge and does not mean it is immune to reliability issue. (Red Ring of Death, anyone?)

Final Thoughts
Don't take this is a blanket excuse for not giving a second thought to buying brand-new hardware models; while all the trends here are valid, designing and manufacturing complex CE gear never will be a foolproof process. Prices will go down, and reliability in the future will be better than today, so waiting is still wiser, even if it's perhaps just not as necessary.

This argument doesn't factor in another more complex and in some ways unrelated fact about electronic: Planned obsolescence. Companies have a separate financial incentive to weighing disposability over long-term reliability. Gone are the days where you can be satisfied with the same television for 20 years—advancements move faster now, sure, but manufacturers now make sure to leave off some future-proofed hardware—or charge a lot more for it—to ensure that your TV won't last too long. Which is a sad, but different, issue.

When the scope is limited to more contemporary times, these trends can be taken as a sign that things are improving, bettering your odds of not getting screwed compared to a few years back. Which is refreshing news for everyone: Getting screwed less in the gadget world = good.

Update: Apple's previously stated that they found a company in China to manufacture their iMacs out of a single piece of aluminum. So, assuming the rumor isn't 100% accurate, this could be a new process with the same company to make MacBooks in a similar way, or Apple found a way to do this themselves with a in-house plant.

Dell has long used their own factories to assemble computers after a consumer places an order—a technique Dell pioneered to cut inventory costs and boost profits. Currently, the company relies on Asian computer parts assembled in Dell US factories—the "two touch" process. The planned transition, which has already been made for some laptops, will move all production to foreign contract manufacturers—something we already see from companies like HP and Apple.

So the only question that remains is whether or not there will be interested buyers in Dell's $2.6 billion in production plants. Because if Dell is backing out of the game, it's gotta be a tough sell to anyone. [WSJ]

That's just under the total number of RAZRs shipped through July of 2006 (the last time anyone cared)—a little less than 3 years into the phone's life. And it equals nearly a third of the 170 million or so iPods that have been sold as of third quarter 2008—another product that's had almost a decade-long head start. And this is a smartphone, with a long-term commitment to an expensive service plan. Pretty big numbers, even if it's still a drop in the bucket when you take worldwide cellphone sales into question (every individual phone is).

And if every iPhone manufactured links up Skynet style via the iTunes store, to melt their unsuspecting owners and form their own sovereign nation-state somewhere, they'd be the 29th-largest country in the world—sliding in comfortably between Ukraine and Colombia. I call president. [Business Week via Mac Rumors]

Seeking Mass Market Acceptance, Apple Stresses Cost Reduction for iPhone 3G

El Segundo, Calif., Jul. 15, 2008—The new iPhone 3G sports an evolutionary design that favors cost reduction instead of cutting-edge features, supporting Apple Inc.’s goal of expanding its market share and achieving a worldwide presence for the product, according to a physical teardown analysis conducted this weekend by iSuppli Corp.
iSuppli’s Teardown Analysis Service on July 11 obtained an iPhone 3G and commenced a dissection in order to identify component suppliers, as well as to determine preliminary part and system costs.
Per the teardown analysis and subsequent examinations by analysts, iSuppli has issued a preliminary estimate of $174.33 for initial production costs for the 8Gbyte iPhone 3G.
This figure consists only of the iPhone 3G’s combined Bill of Materials (BOM) and manufacturing expenses. The total doesn't include other costs, including software development, shipping and distribution, packaging and miscellaneous accessories included with each phone.
iSuppli’s cost estimate is nearly identical to the $173 BOM predicted in iSuppli’s virtual teardown issued to the public in late June.

Cost considerations rule in new iPhone
At $174.33, the BOM and manufacturing cost of the new iPhone is markedly less than the $227 that iSuppli estimated for the first-generation, 8Gbyte 2G iPhone in June 2007. While using a new design, the iPhone 3G really represents a refinement of the original iPhone 2G, according to iSuppli.
“The addition of 3G wireless capability represents an evolutionary design step for the iPhone, not a revolutionary one,” said Andrew Rassweiler, teardown services manager and principal analyst at iSuppli. “iSuppli believes Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price—which will allow the company to seed adoption and to capture maximum market share now—while the company still has buzz and a perceived differentiation relative to its competitors.”
The iPhone 3G’s use of an Infineon Technologies AG baseband chip that supports the HSDPA, WCDMA and EDGE air standards, plus the integration of three separate TriQuint Semiconductor Inc. tri-band WCDMA Power Amplifier Modules (PAMs), reflects the fact that the iPhone 3G is suited for sale worldwide.

Infineon takes key baseband slot
The attached table presents iSuppli’s preliminary analysis of components and suppliers for the iPhone 3G, determined via physical teardown. iSuppli has conducted a teardown analysis of only one 3G iPhone. While there are variations in the components and suppliers for individual products, iSuppli believes that the vendors and parts identified in its teardown likely are representative of all iPhone 3Gs now being shipped—excluding certain memory devices and other commodity parts that are available from multiple sources.
After iSuppli has completed an analysis of a larger sample of iPhones, we will issue further information to the public.
Infineon AG was the big winner in the key baseband section of the iPhone 3G torn down by iSuppli, contributing its HSDPA/WCDMA/EDGE chip that includes dual ARM926 and ARM7 microprocessor cores.
Solely-sourced items include Infineon’s baseband solution, RF transceiver and Global Positioning System (GPS) devices; Samsung Electronics Co. Ltd’s applications processor integrated with Synchronous DRAM (SDRAM); Marvell Technology Group Ltd.’s WLAN device and Cambridge Silicon Radio’s (CSR’s) Bluetooth chip.
Multi-sourced items include Toshiba Corp.’s 8Gbyte NAND flash memory chip. Apple’s other likely sources for this part include Samsung.

Design insights
Other observations made by iSuppli’s analysis team include:

· The redesigned internals of the iPhone 3G include only one large Printed Circuit Board (PCB), instead of the two nested PCBs found in the 2G version. The iPhone 3G uses a 10-layer board, compared to the less-expensive six-layer PCBs commonly employed in mobile handsets.
· The battery is not soldered into the iPhone 3G as it is done in the 2G, making it more serviceable.
· Some chips have the Apple logo or are unmarked. Although iSuppli has been able to identify many of these parts and their true manufacturers by de-capping the chips and examining their dies, some devices remain unidentifiable at this time.

iPhone costs
Beyond the $174.33 BOM and manufacturing cost of the iPhone 3G, Apple is spending an estimated $50 on IP royalties per unit shipped. With the 8Gbyte version retail-priced at $199, and the estimated $300 subsidy paid by AT&T to Apple for each unit, Apple is selling the product at a price of $499, and spending $224.33 to produce each one. This gives Apple a BOM, manufacturing and royalty margin of 55 percent for each 8Gbyte iPhone 3G unit sold.
Please respond to this e-mail to receive photos depicting iSuppli’s iPhone teardown analysis findings.

Often times, these facilities account for 50% of the entire world's production of that particular product, a mind-blowing number by any account. If you ever wondered how the actual people who make these products live and work, check out the National Geographic feature. It's a nice contrast to see the beginning of the lifecycle of a gadget to contrast with the end of one we saw last week. [National Geographic via Boing Boing - Photo by Mark Leong]

Among the observations culled together from separate news stories and "insider intelligence":

• The manufacturing yield rates on BD50 (the 50GB discs) are only 40% from Sony manufacturers and down to 10% yields on non-Sony manufacturers. That means only one in 10 discs made by a non-Sony plant works as a BD50 disc. This in turn leads to higher costs.

• BD1.1 player spec is hard to develop for, leading the only BD1.1 player to be delayed until Q2 2008.

• BD-J, the language they use for special features on discs, is horrible to program for, as we saw already.

• PS3 sales are only 1/4 as much as the 6 million target.

• At least one studio unhappy with Blu-ray.

How much of this is true is still up in the air, but it does give us another look behind the scenes of the format wars. [Campaignhd]

The same Singaporean chip manufacturer, Chartered Semiconductor Manufacturing, has been making 65nm chips for two quarters now. This probably means Xbox 360s will go 65nm fairly soon, but will have to wait about 18 months or so to get to the 45nm threshold. Will it actually make a difference? From what we heard, most of the overheating problems came from the GPU, not the CPU, which is what lead to the added cooling in the Elite version recently. [PCAdvisor]