The cheapest model of Apple Inc.’s new 3G iPhone, which is about to go on sale for $199 in the U.S., thanks to the collaboration between Apple and Telecom firms, costs about $173 to make, according to an estimate by research firm iSuppli Corp.

Notwithstanding other costs, therefore from a basic 8GB phone Apple, Telcos and other players in the value chain will earn $26. This will be shared among them in different proportion. Is $26 will be good enough for a robust profit margin for these players?

Interestingly Verizone CEO Seidenberg has a different view. While describing Apple as a “great company”, Seidenberg rejects suggestion that the iPhone is about to become a mass-market handset because Apple has accepted telecom firms’ request to subsidize it.

“There goes the conspiracy again. You’re declaring them a winner before they’ve earned it on the field” –Seidenberg.

Are you excited about Apple 3G iPhone and its drastic price cut? Hold your breath and you may end up paying more in long term.

Apple 3G iPhone’s price reduction may be a tempting offer but beneath of this entire buzz lays a great marketing strategy. Benefits of this price cut may not pass on to the end consumer. Apple is in negotiation with wireless service provider like AT&T, Verizon etc to sell their iPhone to consumer. Steve Jobs offers discount as large as $199 to Telecom companies per hand set.  Tel-cos on the other hand deal with end consumer and offer a subsidize price. A first look may reveal generous corporate at work. Are they philanthropic?

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Advertising scenarios worldwide are changing rapidly. Traditional medium of mass advertising have changed over the years. Firms are increasingly adopting various ways to advertise their products and services. Celebrity endorsement, games and sport sponsorships, blogging, social networking etc are tried and tested.

Despite a slowdown in the US economy, firms are increasing their advertising spending, at least the big spenders. A report by TNS Media reveals that the top 10 advertisers in the first quarter of 2008 spent a combined total of $4,425.5 million, a 1.6 percent increase from last year. In US market the top 10 advertiser list is filled with conglomerates companies, automotive and Telecom firms who are generally less affected than financial institutes.
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After steel and telecom it’s the time for merger and acquisition in technology firms.

Cadence Design Systems Inc., the largest maker of programs for creating semiconductors, made a $1.6 billion unsolicited bid for Mentor Graphics Corp. As per the Industry insight this bid is to add customers and lower costs as chip makers cut spending.

“A combined Cadence-Mentor will offer customers a broader and more fully integrated product and technology portfolio in a timeframe that better enables them to address urgent and complex challenges associated with their next-generation product development,” said Michael J. Fister, president and chief executive officer of Cadence.

Combining with Mentor will help Cadence trim operating expenses as growth in the chip industry slows, Fister said.

Cadence reported $1.07 billion in operating expenses last year, a 6 percent increase from the previous year.

Full report  here.

IBM’s latest supercomputer Roadrunner can performs operation at the speed of 1 pentaflop.1 penta-flop is defined as one million billion calculation per second. An operational roadrunner will cost you around $100 million. It operates on red hat Linux. This super computer will be used for mission critical application like nuclear energy, astronomy; massive financial service infrastructure etc.Roadrunner is reportedly twice as fast as its nearest rival IBM’s Blue Gene.

IBM built the computer for the U.S. Department of Energy’s (DOE) National Nuclear Security Administration. Interestingly, load runner architecture is hybrid. It uses the Cell Broadband Engine that was originally designed for video game platforms such as the Sony Play station 3. This engine will work along with x86 processors from AMD.