In order to try to explain how the chips/integrated circuits (ICs) behind cutting-edge devices are engineered, and what makes one’s architecture more desirable or cost-effective than another, the easiest approach might just be to take real-world examples. For completeness’ sake, I’ll even take four of them: The 5G iPod, the 1G iPod Shuffle, the Nokia N93, and the Samsung P920. All these devices are aimed at very different markets, and the technology behind each of them is distinct; in fact, even the approaches taken are sometimes very different, partially so because of the intended markets.
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Higher levels of integration, if you have the capability to achieve them, are thus highly desirable if it doesn't mean your product comes out too late to still be meaningful. There are (pretty big) catches to take into consideration, though. The first is the size of your addressable market for any given chip. If your chip is highly integrated, it can also mean it's highly specialized in many cases.
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