Fwd: [Open-graphics] OGD1 pricing

[Timothy Miller]

---------- Forwarded message ----------
From: James Richard Tyrer <tyrerj at acm.org>
Date: Feb 28, 2006 12:21 AM
Subject: Re: [Open-graphics] OGD1 pricing
To: Timothy Miller <theosib at gmail.com>


Timothy Miller wrote:
> On 2/27/06, Jeff Garzik <jgarzik at pobox.com> wrote:
>
>>> But OGP makes it a different animal.
>> Right... so what will the OGP dev board market bear?
>>
>> My guess would be no more than $399...
>>
>
> Heh.
>
> Raw parts costs are more than that, not even including assembly.

IF the parts costs to make 1000 of them are more than $399 each, I think
that you don't have a valid business plan.

<SNIP>

> Putting aside OGP developers, who will get boards one way or another,
>  what should we price it at for the sake of being able to fund future
>  development?

If you expect for this to be a commercial product, you need to make only
a small unit profit on the first run of 1000 based on the theory that
the first run would be used amortize your start up costs for the
hardware -- mostly circuit board tooling.

However, you really need to be able to have this sell this for < $200.00
to sell a significant quantity to the public.  If you figure that
retailers will need a gross of 25% from a suggested retail of $250
and you should have a gross of 50% on you costs on a production run of
10K, then you are talking about cost of parts, a board, and board
assembly of less than $100.00 in quantity for a viable product.

If you can't meet those pricing parameters, you are not going to sell
very many and that means that they are going to cost more which means
that you are going to sell less of them.

Perhaps it is better to consider what you could produce for $80 to $100
in a quantity of 10K rather than considering what you would like to be
able to produce if price weren't a consideration.

--
JRT