At qty 1, you can buy a Mediatek ARM chip with 4 dies for $3 in Shenzhen, China. So how do you compete with that?
Watch this quite interesting talk by Bunnie, who explains how the Chinese view on IP makes this possible and how this could (theoretically) be transferred to the west:
Very interesting talk. Highly recommended as inspiration.
There is a text-version of the same thing on his blog.
Let me know what you think? Can we in the west compete while playing by the traditional IP rules, or do we need to revise that?