Ram & eMMC costs / power drain

[EvilDragon]

Well, we'd need at least 1600 orders for the Premium version to be able to sell it for the wholesale prices.

ADDITIONAL orders to the normal version orders.

 

[Mr_Loon]

Well, we'd need at least 1600 orders for the Premium version to be able to sell it for the wholesale prices.

ADDITIONAL orders to the normal version orders.

How about if the Premium version retailed for €550?

Or if the Premium version retailed for €575 and the base version for €475?

Why €475? This would bring the US$ cost to under $550 and UK£ cost to under £400. I'm no marketing expert but a lot of people who are seem to think that pricing below certain thresholds generates additional profits through increased sales. For some illogical reason £385 does seem significantly less to me than £400 when buying a tech gadget.

If the added complexity is not an issue then I'd suggest an official poll to find out what people would be willing to pay for a premium Pyra and what the likely demand would be.

 

[EvilDragon]

You know the Premium would be without 4G then? Because the 4G version will probably add about 100 EUR to the overall costs.

So the full version would be more than 600 - 700 EUR.

And I can barely keep the base version at 500 EUR (I've already cut more profit than I should and hope to sell more units to get the production costs back), how do you plan do sell it for 475 EUR?

 

[Mr_Loon]

how do you plan do sell it for 475 EUR?

If the demand for a premium version at €575 was sufficient to 'subsidise' the cost of a base unit. My suspicion is that a lot of computing products are sold this way. I can see many reasons why this might, or might not, work for Pyra. I'm not saying 'this is what you should do' what I'm saying is 'find out if this would make sense'.

 

[_jr_]

And I can barely keep the base version at 500 EUR (I've already cut more profit than I should and hope to sell more units to get the production costs back), how do you plan do sell it for 475 EUR?

The power of wishful thinking, most probably. When the preorder starts we will know more.

 

[EvilDragon]

If the demand for a premium version at €575 was sufficient to 'subsidise' the cost of a base unit. My suspicion is that a lot of computing products are sold this way. I can see many reasons why this might, or might not, work for Pyra. I'm not saying 'this is what you should do' what I'm saying is 'find out if this would make sense'.

Yes, that's what a lot of companies do (like Apple, the 16GB version is just so that it sounds cheap).
However, thanks to the huge production run, they still have a lot lower costs, e.g. Apple with 160 USD production costs, selling it for a cheap 399 USD, which still is 233 USD markup!
This is what we can't do, we can never produce for that low price, and the amount of sales won't work here.

Regardless the version, we need to produce and sell at least 1600. So with a Premium and normal version, we need to produce and sell at least 3200.

 

[ible]

probably good to keep it simple, and make the only difference between the base and premium model the 4G modem. that way, you don't split any quantities for other things (eMMC, RAM, etc.) for both base and premium models. you might get you past the MOQ and onto the second tier (or to the moon!) of order prices... the more pre-orders, the more production costs could go down, theoretically at least, right?

we definitely hope you can get your production costs back, sooner rather than later. you can always be a bit more pessimistic in your models (ask for 512 euros instead of 500 ), and then if preorders do better, you could adjust prices for everyone (which i'm sure people would appreciate). or you could give it back as credit in your shop, which helps you in the long run, too.

 

[Mr_Loon]

Regardless the version, we need to produce and sell at least 1600

Does that also apply to the 4G version? If not, why not?

Surely the required sales number is based on the markup that people are willing to pay for, for instance to use an absurd example : the retail price for a Premium Pyra was set at €1000 and there were 400 pre orders for the premium version & 1200 pre orders for the base version at €500. Would this not make a Premium Pyra financially viable?

 

[EvilDragon]

Does that also apply to the 4G version? If not, why not?

Surely the required sales number is based on the markup that people are willing to pay for, for instance to use an absurd example : the retail price for a Premium Pyra was set at €1000 and there were 400 pre orders for the premium version & 1200 pre orders for the base version at €500. Would this not make a Premium Pyra financially viable?

The minimum order quantity for the eMMC chips is 1600, so if we want a 64GB and a 16GB variant, we need to buy 3200.
The MOQ for the 4G module is 500.
[doublepost=1460028320,1460028249][/doublepost]

Surely the required sales number is based on the markup that people are willing to pay for, for instance to use an absurd example : the retail price for a Premium Pyra was set at €1000 and there were 400 pre orders for the premium version & 1200 pre orders for the base version at €500. Would this not make a Premium Pyra financially viable?

Yes, of course, something like that would work. However, that's not easy to handle.
What would you do if you don't get the 400 preorders for 1000€?
Refund everything?

 

[levi]

Edit: I wrote this before ED clarified that the 1000 units wasn't the MOQ. I can't be bothered editing it.

Well, it should be possible to work out the impact on part price and therefore total price based on the numbers ED can give. Assuming he can't find a buyer for any spare parts out of the 1000 (or 950) he orders (Niklaus may know someone, I guess) he'll just have to leave the remainder on the roll even having paid for them. So instead of 10000EUR for 950 in the 32GB version, it'd be 10000EUR for 500, if there were 500 orders for the 32GB, it'd be about twice the part price.

If you know the demand, you know the price, so the latter question is redundant. Personally, based on feedback in the last news thread, I think there is probably demand as the most vocal people at least seem to value the space at more than it actually costs (probably based on Apple's sales tactic of adding hundreds of dollars for the top capacity devices). And given if bought in bulk the cost is not insurmountable, for people like me that won't be using all that space in all likelihood, it's not going to put me off buying a unit. So I'd be against a premium unit based on eMMC capacity, just sell one unit with lots of eMMC space,

 

[Swordfish II]

Yes, of course, something like that would work. However, that's not easy to handle.
What would you do if you don't get the 400 preorders for 1000€?
Refund everything?

I dont support the idea... But you could open premium preorders, require full price paid upfront and see if you get enough actual orders to go through with it. That would also prevent people from saying they are going to buy one and then not following through.

 

[levi]

And then if you only get 380 orders, what do you do?

 

[Grench]

The minimum order quantity for the eMMC chips is 1600, so if we want a 64GB and a 16GB variant, we need to buy 3200.
The MOQ for the 4G module is 500.

So, to make this work with an estimated (maximum) 5% fail rate, you will need to sell, more or less,
Euro spec 4G units in multiples of 475.
US spec 4G units in multiples of 475.
Net Euro+US+no4G units in multiples of 1440.

Euro 4G sale # 476 dictates another 500 Euro spec 4G modules. Unit 1441 dictates another 1600 eMMC modules.

I'm sure every individual part with it's individual MOQ and it's individual lead time has to be less than fun to keep track of.

May you sell so many of them that the MOQ of any given component becomes irrelevant.

 

[Neelix]

So, to make this work with an estimated (maximum) 5% fail rate, you will need to sell, more or less,
Euro spec 4G units in multiples of 475.
US spec 4G units in multiples of 475.
Net Euro+US+no4G units in multiples of 1440.

Euro 4G sale # 476 dictates another 500 Euro spec 4G modules. Unit 1441 dictates another 1600 eMMC modules.

I'm sure every individual part with it's individual MOQ and it's individual lead time has to be less than fun to keep track of.

May you sell so many of them that the MOQ of any given component becomes irrelevant.

Except that ED will be taking pre-orders, so at least for the initial production run he'll know approximately how many he'll need of each. If he got say 650 pre-orders for one or the other would he not be able to purchase an intermediate amount (eg 700) to cover the production?

-Neelix

 

[thatgui]

And then if you only get 380 orders, what do you do?

Tell them that they get their money back if not enough preorders are made (maybe minus some money transfer fees) ?

 

[vcoleiro1]

I wonder what EDs sales projections are.

 

[Mr_Loon]

I wonder what EDs sales projections are.

From the bugs and calculations news post ED stated that 1500+ is what he'd like to sell as this is the number required to ensure that future sales could be from stock rather than via pre order.

Yes, of course, something like that would work. However, that's not easy to handle.
What would you do if you don't get the 400 preorders for 1000€?
Refund everything?

Here is how I would do it :

Email all 200 that have pre pre orders and find out if they would rather have a base unit (2GB Ram 32GB eMMC) for € X or a premium unit for the higher price of € Y, or if they'd even be willing to pay the even higher rate of € Z. You could also ask the 3G / 4G, US / ROTW question as per the other thread.

Also put these questions on an official poll on the forum to be answered by those who would like to buy a Pyra but don't have a pre order.

Run figures from the answers given through a spreadsheet to show whether it would make financial sense to consider offering a Premium Pyra.

I strongly suspect that if certain things are confirmed such as there is a noticeable improvement of running Apps / an OS from eMMC compared to SD card / USB2 and that swap performance of the eMMC though good is noticeably not as good as actual Ram then the level of demand for a premium unit will be sufficient for it to make sense financially.

Let's imagine a base unit retails for €500, for a UK customer that is £400, there is 20% VAT on top of that brings it to £480, then a delivery charge, say £20, bringing the total to £500 (quick word from my wallet : 'ouch').

Let's say the Premium Pyra retails for €530 (roughly based on ED's planned 15% markup on extra costs of €25), that's £425 or £530 including VAT and delivery.

Based on the assumption that extra Ram and fast storage would bring real added value to the system I'd be willing to bet that there would be quite a few takers for the premium version.

However things get interesting if enough people are willing to pay €550 (or more) for a premium version as the additional profits gained could (either eventually or immediately) be used to slightly subsidise the cost of the base unit thus hopefully increasing sales numbers still further.

Any unsold eMMC modules can be used on future production runs, it's not money wasted.

NB It's fully appreciated that money is tight but if enough extra profit could be made through including the pre order sales option of a premium unit then offering a premium unit could actually help with the finances.

 

[Grench]

Except that ED will be taking pre-orders, so at least for the initial production run he'll know approximately how many he'll need of each. If he got say 650 pre-orders for one or the other would he not be able to purchase an intermediate amount (eg 700) to cover the production?

-Neelix

To my understanding, no.

Since the 4G modules come in trays of 500, to sell 650 units with an expected yield of 95%, he would need to purchase 2 trays. If he does not sell the entire expected yield of 455*2 = 910 units, then the 650 units he did sell still has to cover the costs of the 2 trays. Hopefully he'll sell thousands of each type and the per tray quantities on-hand will become a non-thing.

An analogy:
It's like walking into the grocery store and asking to purchase 21 eggs. The fact that your recipe multiplied out to 21 is irrelevant to them as they sell eggs in packaged quantities of 12, 18, 36 or 180 (15 Dozen box). If they happen to have a packaged quantity with some broken ones, they might be convinced through negotiation to sell that one at a pro-rated price without guarantee - but that becomes a pain to do over every ingredient you need to make your cake. The eggs have a shelf life too - much like open trays/reels/packages of electronic components. Better to buy them when you're ready to bake.

 

[rygD]

Just boil and pickle the ones that are left over.

Maybe the extra can be used for the Neo900 (not sure what that are using). If both projects could split the cost of incomplete trays I like to imagine it is better for everyone.

 

[Mr_Loon]

From ED in the Finalizing everything thread :

Quite a few of you have cried for a 4GB version, and we MIGHT be able to provide one.
When we started, there only were 512MB versions of the RAM chip available that we're using for the OMAP5.
Now there's also a 1GB version available, and if we're using 4 of them, that would add up to 4GB RAM.
And for the 2GB version, we would only use two of those chips

That would have some advantages:

* Two 1GB chips will probably be a few EUR cheaper than four 512MB chips (though this is marginal)
* Two chips will probably use less power than four chips, and every mW of power we can save is useful.
* Both the 4GB and 2GB CPU board would use the same RAM chips, which means we wouldn't need to buy different types of chips but just populate two or four of them. This is REALLY helpful for the MOQ (Minimum order quantity) and for an easy production run.

However, take this info with a grain of salt right now.
We first have to check whether the OMAP5 works with only two memory chips instead of four, and we need to make sure maintaining both versions here is not a lot of work.

What we also don't know yet is whether we'll offer the 4GB as an optional upgrade or include it with the 4G version. It'll become pretty complex for the production run if we have so many different version.

Of course, once we'll know more, I'll let you know.

It would be good to hear things like the actual benefit of using 4GB of ram compared to using the Nand for Swap when 2GB ram use is exceeded,

It may also be prudent to contact your pre pre orderers if it turns out you can only populated the Pyra with 4 Ram chips and see if people would rather pay the extra for 4 x 1GB as the default configuration rather than 4 X 512MB.

Knowing the battery implications of 4 X 1GB compared to 4 X 512MB would also help.