... we're still alive!

[Exophase]

20EUR in a single part cost with production failure rates, board population fees, markup to cover returns, advertising, profit winds up being a 50EUR single part by the time the device sells retail.

Why would these things scale with the cost of the part? The bigger eMMCs are not more expensive to populate if they're the same pinout, and if this is even being discussed as an option then they'd better be. It also doesn't increase the cost of advertising. The cost of failure would also include a lot of non-proportional expenses like scrapping the whole CPU board or having to rework a new eMMC chip. But I doubt the failure rate is that high.

I just don't see how a fixed 250% rule of thumb makes sense.

 

[asdfffdsa]

I don't post here frequently but I lurk quite a bit. I saw this and I had to comment: at the very least I would go with 16GB. I don't know about other people but I plan to use the Pyra as a dockable desktop. In fact even if I were to solely use it as a portable computer then I'd still say 16GB.

Keep up the great work, pretty amazing watching this unfold. . Looking forward to the day when I can get rid of this hand-me-down iPhone

 

[Grench]

Why would these things scale with the cost of the part? The bigger eMMCs are not more expensive to populate if they're the same pinout, and if this is even being discussed as an option then they'd better be. It also doesn't increase the cost of advertising. The cost of failure would also include a lot of non-proportional expenses like scrapping the whole CPU board or having to rework a new eMMC chip. But I doubt the failure rate is that high.

I just don't see how a fixed 250% rule of thumb makes sense.

The cost of failed population, i.e. the cost of thrown out boards scales linearly to a multiple of component costs. This means that the bigger EMMCs ARE more expensive to populate due to the increased costs of failures.

RMA replacement costs scale linearly to a multiple of component costs.

Advertising may not scale to component costs, but the component costs -squeeze- the available advertising budget as a proportion to unit costs if retail price stays constant.

Financing costs for money to cover the purchase of the components scales directly to component costs.

The smaller the batch the higher the failure rate as a proportion of production is likely to be. On 50000 units it may only be 1-2%. On 1500 it could easily be as high as 5%. On 20 it is apparently 50%.

Profit would need to be higher on a more expensive set of parts because the financial outlay (risk) is greater on the front end. Increasing the component costs increases the financial outlay which requires additional return to justify.

So, you can use a 200% or 250% or other as rule of thumb - the actual line is admittedly arbitrary. However, doubling the per-piece wholesale costs of a single component can/will/does have effects on the final cost of production and expected rate of return that can be multiples of the wholesale cost difference of the component.

 

[vcoleiro1]

Well it seems likely that from what ED said previously, that he will be using the 32GB eMMC.

Would have been nice to get 64GB , but 32GB is doable for me.

 

[EvilDragon]

Maximum failure rate for us is 5%, everything else is covered by GC (though it will probably be a lot less).

This means my calculation is based on the fact that we pay for 1000 but only receive 950 working ones.

So, in case of the eMMC that means:
8GB = 4 EUR = 4000 EUR for 950 = 4,21 EUR
16 GB = 7 EUR = 7000 EUR for 950 = 7,36 EUR
32 GB = 10 EUR = 10000 EUR for 950 = 10,52 EUR

If I keep he planned margin of 15%, then the prices would be:
8 GB: 4,84 EUR
16 GB: 8,46 EUR
32 GB: 12,10 EUR

So using 32GB eMMC instead of 8GB will increase the end price by 7,26 EUR.

BTW: Read something interesting today:
The production costs for an iPhone SE (16GB) is estimated at 160 USD. The sales price is 399 USD.
That's 250% profit.

iPhone SE (64GB) is estimated at 170 USD. The sales price is 499 USD.
That's 293% profit.

Now, if I would take 250% profit on the production costs of one Pyra, it would cost 875 EUR... instead, the price will be around 500 EUR

It was similar to the Pandora, and then there are always people who complain that it's only overpriced because I am greedy an want to make a lot of money..

 

[Swordfish II]

Something like that is good if you really wanna get all you can out of it. Mine came with XP but I changed it to Xubuntu. Worked better than I thought it would.

Yeah my problem with XP is that it takes up the whole SD. An nlited version knocks it down a bit, but after driver installs it is right back up there.. Or you end up not having various plug and play drivers.

I'll have to check distros again.

 

[Wrath Of Khan]

Thats very interesting about the i-phones ed- I suspected as much. Huge profits.

 

[vcoleiro1]

@ED

So have you locked in the eMMC size you will use?. From a previous post, you seemed to be locking in on 32GB.

 

[Swordfish II]

It was similar to the Pandora, and then there are always people who complain that it's only overpriced because I am greedy an want to make a lot of money..

If anyone says that they don't deserve to be sble to buy one. You have been more than fair from everything I have read and seen, and nobody works for free.

 

[EvilDragon]

@ED

So have you locked in the eMMC size you will use?. From a previous post, you seemed to be locking in on 32GB.

Pretty much, yes.

If anyone says that they don't deserve to be sble to buy one. You have been more than fair from everything I have read and seen, and nobody works for free.

Still, it's sad seeing how much you struggle to do something and then there are so many ignorant people out there who call you greedy as Apple or some other favourite smartphone manufacturer is cheaper, so they make a lot less profit...

 

[Mr_Loon]

That's 250% profit.

No it's not, that's 250% markup, there is a huge difference between markup and profit. That markup has to cover ALL costs, development, staff, advertising, premises, company cars etc.

Many thanks for the clarification of the impact on retail costs, it feels really special to me to be able to be able to directly engage with the manufacturer of what to me is a dream device.

 

[vcoleiro1]

Pretty much, yes.

Cool

Hey , do you know roughly how much extra the 3G/4G + GPS Pyra model will be over the base model.?

 

[donfabio]

Pretty much, yes.

Yes! So worth the extra 7€ for not having to worry about storage. Also nice benefit of being able to use more speedy internal memory instead of relying on SD cards.

 

[EvilDragon]

No it's not, that's 250% markup, there is a huge difference between markup and profit. That markup has to cover ALL costs, development, staff, advertising, premises, company cars etc.

Yes, but that's also not included in the Pyra costs, so it's a direct compare.

If I planned to get the development costs as well (about 150.000 EUR, I guess) with the first 1000 units sold, then I'd need to increase the price to at least 650 EUR for the normal version.

 

[Wrath Of Khan]

Still, it's sad seeing how much you struggle to do something and then there are so many ignorant people out there who call you greedy as Apple or some other favourite smartphone manufacturer is cheaper, so they make a lot less profit...

Who said you were greedy? A misinformed article somewhere? The internet is an open flood gate- a good and a bad thing.

 

[fusion_power]

So using 32GB eMMC instead of 8GB will increase the end price by 7,26 EUR.

I would not listen to all these "more Storage" people, honestly. Nobody really needs 32GB internal memory, we have actualy 3 SD slots in the Pyra. I don't understand why so many people still want more and more storage. What you guys want to do with your Pyra? Using it as Data-Storage Server or what?

Now, if I would take 250% profit on the production costs of one Pyra, it would cost 875 EUR... instead, the price will be around 500 EUR

Wrong direction of thinking, ED. You should ask how to keep the Price of 500 EUR and still do 250% profit with the Pyra, thats the real question.

Yes! So worth the extra 7€ for not having to worry about storage. Also nice benefit of being able to use more speedy internal memory instead of relying on SD cards.

You still miss the more important point: 7€ does not sound much but it has a gigantic impact on the "psychological price barrier" of 500 EUR (I would set it to 499.95€ actualy- sounds better). So it could harm more than it benefits if less people want to buy a Pyra because the price is to high (or sounds to high even if it is not much more than 500 €).

So I would keep the 8-16GB internal storage instead of 32GB, not even Win10 (mobile) uses that much space.

 

[vcoleiro1]

@fusion_power, it isn't about more storage. There is a portion of the user base like myself who given a small/moderate amount of eMMC will use it for not just the OS , but apps/games also. They are small/moderate use users who have no plans on filling huge SD cards up with apps, they can suffice with 32GB for their apps/games. For example, I have no plans on using more than 32GB , it's plenty for me. By having 32GB eMMC I can enjoy fast speeds for the OS and my apps and games. ie a reasonable eMMC size is going to benefit me and others a whole ton more than reems of SD storage I'll probably never use (although nice to have just in case that changes)

ie It's not about increasing total storage. But providing the best balance/benefit for all user types of the user base

 

[rygD]

But what about the other portions of the user base that would rather have other things instead of more internal storage?

 

[Swordfish II]

@fusion_power, it isn't about more storage. There is a portion of the user base like myself who given a small/moderate amount of eMMC will use it for not just the OS , but apps/games also. They are small/moderate use users who have no plans on filling huge SD cards up with apps, they can suffice with 32GB for their apps/games. For example, I have no plans on using more than 32GB , it's plenty for me. By having 32GB eMMC I can enjoy fast speeds for the OS and my apps and games. ie a reasonable eMMC size is going to benefit me and others a whole ton more than reems of SD storage I'll probably never use (although nice to have just in case that changes)

ie It's not about increasing total storage. But providing the best balance/benefit for a portion of the user base

What doesn't make sense (and I agree), is you could get a small sd card for cheap to store that stuff.

SPEED ISNT AN ISSUE. Things run at full speed and just fine off an SD card, and the OS would never go on one anyway (unless you chose to do so)

That said, I am OK with 32gb. I think it is more than needed, but i am OK with it.

 

[vcoleiro1]

The benefit in eMMC for running apps/ and games comes in load time. Everytime you start an app or game you enjoy the benefit of that eMMC. Everytime a game loads a new level or data set, you enjoy that eMMC speed. That's a benefit we will enjoy everyday, for every app and game you run - for ever . Not a small thing to be scoffed at, especially for those of us who 32GB of eMMC will be enough for our games/app needs.

@rygD, what about if I said why have three SD type slots (2 SD and one uSD) , surely the other portion of users shouldn't have to pay for three slots. Why do you need three slots, surely we have enough storage options/limit with just 2. See how that works.

I think ED has made the right decision on coming up with a balance that makes everyone happy.