I'm surprised I haven't seen this mentioned yet, but at I/O during his Q&A Larry Page talked a fair bit about how he wants to see manufacturing get more streamlined, Maybe this could be related?
> Smartphones, Page said, are “relatively expensive,” with the raw material costs — glass and silicon — is “probably like $1, or something like that. I think glass is 50 cents a pound. Phones don’t weigh very much. So I think when I see people in industry making things, I ask this question, how far are you off the raw materials costs. So as an engineer, trying to go to first principles, what is the real issue? What’s the real issue around our power grids, or around manufacturing? I think a lot of people don’t ask those questions, and because of that, we don’t make the progress we need to. If you’re going to make a smartphone for a dollar, that’s almost impossible to do. But if you took a fifty-year view, you’d probably make the investments you need to, and you’d probably even figure out how to make money. So, I encourage non-incremental thinking.”
I manufacture things out of steel. Steel costs 50 cents a pound for sheet and $2 a pound for welding wire. The freight to ship it to my distributors is another 50 cents a pound, and the advertising and marketing cost is about $2 a pound.
So ultimately I agree with Page. The cost of manufacturing anything goes on along a 1/x curve over time, and approaches the raw material cost. Its the other costs that don't do that, like engineering talent, marketing spends, warehousing, shipping.
> Smartphones, Page said, are “relatively expensive,” with the raw material costs — glass and silicon — is “probably like $1, or something like that. I think glass is 50 cents a pound. Phones don’t weigh very much. So I think when I see people in industry making things, I ask this question, how far are you off the raw materials costs. So as an engineer, trying to go to first principles, what is the real issue? What’s the real issue around our power grids, or around manufacturing? I think a lot of people don’t ask those questions, and because of that, we don’t make the progress we need to. If you’re going to make a smartphone for a dollar, that’s almost impossible to do. But if you took a fifty-year view, you’d probably make the investments you need to, and you’d probably even figure out how to make money. So, I encourage non-incremental thinking.”
http://blogs.barrons.com/techtraderdaily/2013/05/15/google-c... (The first transcript I could find)