[cycomanic]

It's funny how everyone (especially here on HN) accepted (and expected) extremely high profit margins from software businesses, but now that hardware companies are increasing their margins to match it is suddenly outrageous. The same was reflected in engineering salaries, with software engineering salaries being often a multiple of hardware engineering ones. All this despite the fact that software businesses is arguably much easier, less risky and less capital intensive.

For decades now we have seen the expectations that software businesses (and in particular FANGs) have pushed any hardware margnins to be more and more like commodities, while they were extracting all the value.

[pyrale]

This exactly. The software industry has enjoyed lack of antitrust for decades now, and only complains now that others are able to ask any price against them.

[merelydev]

> It's funny how everyone (especially here on HN) accepted (and expected) extremely high profit margins from software businesses

Because software you build it once and can resell it as much as you want, a stick of RAM is only sold once.

> The same was reflected in engineering salaries, with software engineering salaries being often a multiple of hardware engineering ones.

Arguably software is much more difficult to build because it is never complete.

[adrian_b]

This phenomenon of "hardware companies are increasing their markets" is just a consequence of the fact that the memory market is now dominated by quasi-monopolies.

Decades ago, when memory production still existed in many countries, no such margin increases would have been possible.

Even now, this would not have been possible without the US government actively suppressing competition in the memory market, by sabotaging the Chinese memory producers.

The so-called "sanctions" against the Chinese memory producers have started some years ago precisely in the moment when Micron was threatened to lose market share to the Chinese producers (e.g. when Apple was considering to switch to them as providers). Based on the "Cui prodest?" principle, it is extremely likely that Micron was the entity who lobbied the US government to sabotage the Chinese memory producers, creating the environment where companies like OpenAI could successfully drive the memory prices to record levels.

[vkou]

> is just a consequence of the fact that the memory market is now dominated by quasi-monopolies.

And software isn't?

[amarcheschi]

If you need to sponsor an event or something, you have to choose between an American big tech, another American big tech, another American big tech, or another American big tech