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View Thread: Ballmer confirms shift to devices and services
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    Look, it doesn't have to be difficult, right?

    Let's do a little exercise: let's pretend for a second that a tablet is made by software (OS + drivers) and hardware (CPU, RAM, SSD, display). It's simplistic, but close enough.

    Now, let's see how much is Samsung's cost in arbitrary units:

    • OS: 3AU
    • Drivers: 2AU
    • CPU: 2AU
    • RAM: 0AU (they make it)
    • SSD: 2AU
    • Display: 0AU (they make it)
    • Total: 9AU

    And Microsoft's cost:

    • OS: 0AU (they make it)
    • Drivers: 2AU
    • CPU: 2AU
    • RAM: 1AU
    • SSD: 2AU
    • Display; 3AU
    • Total: 10AU

    Now, we can discuss how much is a AU and the relative weight of them, but it should be evident that both companies buy some components and build in house some others. Plus, let's keep in mind that the OS for Microsoft's tablet is not free for the HW division, as it has to be "bought" from WinDiv. In the end it all balances out at the corporate level, but the cost/revenue allocation is not a simple writeoff.