How Thrilled Is Texas Instruments to Have Its Chips in the Kindle Fire?
Yesterday, I published a story about 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 Amazon $201.70 to buy the parts and build the Fire — a sum which is only slightly above the $199 retail price of the device.
The other big news was how dominant the chipmaker Texas Instruments is among the suppliers. Its applications processor chip, wireless chips, and audio and power management chips add up to about $25, approximately 12 percent of the bill of materials (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); 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, minimize its loss and pave the way to eventually selling the device at a profit.
Suppliers hate teardowns, too. There is nothing more secret — or more interesting to know — than what company is supplying a manufacturer with a key component. Companies can rise or fall on a strategic relationship with someone like Apple or HP — or Amazon. The first iPod, for example, put an otherwise unknown company named PortalPlayer on the map — 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 nondisclosure 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 of yesterday, I got a comment from Texas Instruments. And that 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.”
Not exactly riveting. But rare!