

Microsoft talks about reducing its costs, not ours





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RE: Hopefully they'll be more creative...
By Oregonian2 on 11/28/2006 7:18:52 PM , Rating: 3
Speaking as a circuit designer and system architect of over thirty years experience, I stand by my previous comments. However I'll add the phrase "spec'd in" to my "designed in" in order to be more explicit.

Suppliers would do anything they can to get their foot in the door up front because of future expected volume. Microsoft won't use the cheapest DVD drive du jour with twenty brands of DVD drives among the Xbox'es. They'd likely have very very few, but probably at least two. They'd be heavily tested and qualified with pricing, quality (including return/repair language defined) and volume availability arraigned up front, chosen between all the possible suppliers. It's not the same as buying one unit. They need volume, they need it delivered on schedule, they need them all to work to spec and do so for some time longer than Microsoft's guarantee(if not longer :-). Any power brick would have been custom designed and
heavily tested as well as priced to trim off any cents they can within other constraints.

Also note that they don't buy (and get priced) from order to order,
even among much lower volume electronic manufacturing, pricing is often set on a volume-per-year basis, not on a per-order basis, and so Microsoft's first year of production would be huge. But because of that hugeness, they can do better than that normal operating practice sort of purchasing methods (like getting binding quotes ahead of even picking technologies to use -- heck even I do that in my much lower volume designs)




