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If you turn on your cell phone and browse through your phonebook, that's an embedded controller. An embedded controller is basically anything that is embedded into an electronic device to allow the user to control specific functionalities.
One of the problems with embedded software development like a cell phone's phonebook browser is that you have to have it custom made. While the newest model may reuse a revamped version of an older model's software, the fact still remains that the software has to be embedded right into the system. This means that you have to have your embedded microcontroller custom made.
This is because you can't very well download Windows Vista or Linux into your cell phone; all capabilities are hardwired. An embedded system control has to be specifically created for the electronic product that is going to house it.
More recently, there has been a big surge in so called handheld computers. Handheld computers would include a variety of products like PDA systems like the iPhone and Blackberry. These are not technically considered to be single board computers, as you can actually attach peripherals and a few small components actually can be switched out without compromising the entire unit. However, even these require the same kind of dedicated hardware and software as any "official" single board computer.
If you're making laptops or desktop computers, you don't really have to deal with this problem. You can take any old mass produced motherboard, stick it into the casing, and attach any other mass produced components you like. When you're using a single board computer, or an embedded system, everything has to be built exactly as it will be in the final product.
If you're not careful, this can seriously eat into your production costs. It's not uncommon for projects to go over budget fast just because the planner wasn't yet familiar with the concept of single board computers (just another reason why the people at Apple have separate departments for laptops and PDA devices).
A basic rule of production: If it's not already being mass produced, it's going to be more expensive per unit. This is factory management 101. Unfortunately, if you need an embedded computer unit, you don't have a lot of choices.