Rabbit 3400 CPU module

On Thu, 14 Jul 2005 20:17:27 GMT, William Meyer <wmeyer@sbcglobal.net>
wrote:

>Jonathan Kirwan wrote:
>> On Thu, 14 Jul 2005 02:25:48 GMT, Kelly Hall <khall@acm.org> wrote:
>> 
>> 
>>>Great deal - I always like buying dev kits when the company loses money 
>>>on the sale!
>> 
>> 
>> Oh, and Kelly... they sell the 3720 at $55 in singles.  Why would you
>> imagine they are losing money?
>
>The dev kit includes the wall wart, the Dynamic C compiler, a 
>development board into which to plug the RCM3720 card, a wall chart of 
>info on the CPU...
>
>I believe the module price is just that -- the price for the bare module.

Yes, that was my understanding.  I also note that the $99 price
appears to be gone.  But my logic for asking the question follows this
line of reasoning:

(1)  Products, including development kits, sell in qty-1 pricing with
a factor of about 4X the actual BOM costs.

(2)  If the 3720 is selling (not on special, but normally) in qty-1
for $55, I tend to imagine that the cost to put it into the shipping
box is in the $14 range.  Certainly, no more than $20.

(3)  I wasn't able to find the prototyping board separately, but lets
grant it the same cost -- somewhere from $14 to $20.

(4)  The software's manufacturing cost is nil.  There may be some
supposed lost opportunity in including it, but it's not a hard cost
item.  Further, if a developer decides to use this system in a
product, then the profits will arrive from the sales of the modules
when more than a few of them are involved (which, I'm sure, is Rabbit
Semi's hope -- no one likes the idea of having to support lots and
lots of one-off customers.)  Let's call the CD cost as $2.

(5)  The AC adapter is close to nil.  Being very gracious, call it $4.

(6)  The serial cable is also close to nil.  Neck and neck with the AC
adapter.  Frankly, I'd be surprised if it is over $2 to Rabbit.  But
let's call it $4, being the gracious folks we are.

Total?  $20*2+4*2+2 = $50 cost.  Even if I am off by a factor of two
on all these (and I'm sure I'm not that far off) then we aren't
talking about losing money.

The short of this is that I don't believe they lose money every time
they sell the kit, even at $99.  Of course, I completely understand
their desire for $199 -- as that is about 5X what I believe is their
actual cost and that is about what one tends to price at, ignoring
knowing more about the business (which I cannot pretend to know.)  And
I am willing to accept that $99 is probably good pricing worth serious
consideration, if you need their development kit and their software,
too.

By the way, I didn't notice the chart being mentioned (though I can
now see something that looks like a fold-over in the zoomed up picture
of the kit) and I haven't talked about the reference book they are
tossing in or other printed docs.  I'm sure these account for a few
dollars, as well.  But nothing to cause this to become a loss.

I remain unconvinced that they are losing money selling these at $99.
But I do suspect it is a nice deal for those needing exactly these
features and intending to buy, anyway.

Jon

On Thu, 14 Jul 2005 21:08:56 GMT, Jonathan Kirwan
<jkirwan@easystreet.com> wrote:

>  I also note that the $99 price
>appears to be gone.

Whoops!  I was looking NOT at the promotion page.  My bad.

Jon

Jonathan Kirwan wrote:
> 
> Yes, that was my understanding.  I also note that the $99 price
> appears to be gone.  But my logic for asking the question follows this
> line of reasoning:
> 
> (1)  Products, including development kits, sell in qty-1 pricing with
> a factor of about 4X the actual BOM costs.

As may be, and Kelly's assumption of a loss was likely erroneous. But so 
what? Why would we wish anyone to sustain a loss?

> (2)  If the 3720 is selling (not on special, but normally) in qty-1
> for $55, I tend to imagine that the cost to put it into the shipping
> box is in the $14 range.  Certainly, no more than $20.
> 
> (3)  I wasn't able to find the prototyping board separately, but lets
> grant it the same cost -- somewhere from $14 to $20.
> 
> (4)  The software's manufacturing cost is nil.  There may be some
> supposed lost opportunity in including it, but it's not a hard cost
> item.  Further, if a developer decides to use this system in a
> product, then the profits will arrive from the sales of the modules
> when more than a few of them are involved (which, I'm sure, is Rabbit
> Semi's hope -- no one likes the idea of having to support lots and
> lots of one-off customers.)  Let's call the CD cost as $2.
> 
> (5)  The AC adapter is close to nil.  Being very gracious, call it $4.
> 
> (6)  The serial cable is also close to nil.  Neck and neck with the AC
> adapter.  Frankly, I'd be surprised if it is over $2 to Rabbit.  But
> let's call it $4, being the gracious folks we are.
> 
> Total?  $20*2+4*2+2 = $50 cost.  Even if I am off by a factor of two
> on all these (and I'm sure I'm not that far off) then we aren't
> talking about losing money.

More relevant is that their development bundles normally list for 
anywhere from $130 on up, with the lowest being for older Rabbit 2000 
products. The product at the URL I specified has a normal list of $199, 
which appears to be consistent with their other pricing. It has been 
offered on that URL at $99, for some time now, and more recently, they 
have offered the book as a free bonus.

> The short of this is that I don't believe they lose money every time
> they sell the kit, even at $99.  Of course, I completely understand
> their desire for $199 -- as that is about 5X what I believe is their
> actual cost and that is about what one tends to price at, ignoring
> knowing more about the business (which I cannot pretend to know.)  And
> I am willing to accept that $99 is probably good pricing worth serious
> consideration, if you need their development kit and their software,
> too.

I sincerely hope they do not lose money. I'm happy to get a good deal, 
but if the vendor bleeds for my benefit, it is not, in the long run, 
likely to benefit me -- I need a supplier whose long-term health is not 
uncertain.

> By the way, I didn't notice the chart being mentioned (though I can
> now see something that looks like a fold-over in the zoomed up picture
> of the kit) and I haven't talked about the reference book they are
> tossing in or other printed docs.  I'm sure these account for a few
> dollars, as well.  But nothing to cause this to become a loss.
> 
> I remain unconvinced that they are losing money selling these at $99.
> But I do suspect it is a nice deal for those needing exactly these
> features and intending to buy, anyway.

It is indeed a nice deal, and if it makes some modest profit for them, 
so much the better. I'm a great fan of profitability, for developers, 
suppliers, and others. ;)

Bill

On Thu, 14 Jul 2005 21:43:15 GMT, William Meyer <wmeyer@sbcglobal.net>
wrote:

><snip>
>It is indeed a nice deal, and if it makes some modest profit for them, 
>so much the better. I'm a great fan of profitability, for developers, 
>suppliers, and others. ;)

And there, we can agree.  I just didn't see why anyone should imagine
they were cutting their nose off on this one.  Some manufacturers
really do, you know, lose money with the idea of making something very
nice and cheap enough so that an engineer might just buy it or get it
'on spec.'  Like an impulse item, really -- speculating that it might
be useful in the not-too-distant future.  This is how I picked up a
system for the Mot. '908's, for example -- it was exactly free.  No
question here that Motorola lost money.  And the world is confusing
enough that it is helpful to avoid going around adding to it by
conflating the cases where some manufacturers really DO lose money
with those cases where they don't.

Jon

Jonathan Kirwan wrote:
> 
> And there, we can agree.  I just didn't see why anyone should imagine
> they were cutting their nose off on this one.  Some manufacturers
> really do, you know, lose money with the idea of making something very
> nice and cheap enough so that an engineer might just buy it or get it
> 'on spec.'  Like an impulse item, really -- speculating that it might
> be useful in the not-too-distant future.  This is how I picked up a
> system for the Mot. '908's, for example -- it was exactly free.  No
> question here that Motorola lost money.  And the world is confusing
> enough that it is helpful to avoid going around adding to it by
> conflating the cases where some manufacturers really DO lose money
> with those cases where they don't.

Oh, absolutely! If not for profit, why are we doing all this work? ;)

I'm in favor of low-margin introductory items, but as I said before, I 
want the vendor to remain healthy, else why bother to learn to use his 
stuff?

Bill

On Thu, 14 Jul 2005 23:39:38 GMT, William Meyer <wmeyer@sbcglobal.net>
wrote:

>Jonathan Kirwan wrote:
>> 
>> And there, we can agree.  I just didn't see why anyone should imagine
>> they were cutting their nose off on this one.  Some manufacturers
>> really do, you know, lose money with the idea of making something very
>> nice and cheap enough so that an engineer might just buy it or get it
>> 'on spec.'  Like an impulse item, really -- speculating that it might
>> be useful in the not-too-distant future.  This is how I picked up a
>> system for the Mot. '908's, for example -- it was exactly free.  No
>> question here that Motorola lost money.  And the world is confusing
>> enough that it is helpful to avoid going around adding to it by
>> conflating the cases where some manufacturers really DO lose money
>> with those cases where they don't.
>
>Oh, absolutely! If not for profit, why are we doing all this work? ;)

Hmm?  I do it because I love it.  I'd do it if I weren't paid for it,
though probably less of it.

>I'm in favor of low-margin introductory items, but as I said before, I 
>want the vendor to remain healthy, else why bother to learn to use his 
>stuff?

What can I say?  I want more choices than less -- at least, that is,
if they are offering something I may need in my short lifetime,
anyway.  But I want them getting rich off of my customers, not off of
me!

More to the point, I suppose, is this:  They are the ones who have the
greater benefit if I help sell their product by designing it into a
product.  Since they reap the upside of their business, I think it is
more their capital that should be risked in the first place.  And
less, mine.  (If they want to cut me into a percentage of their
profits, I'll take up more risk.)  Or, in other words, I understand
why companies do give away excellent development tools at zero or very
reduced cost.  It can make good business sense.

But focusing back on why I said anything at all, I just prefer not to
conflate what *is* clearly a real loss-leader with what isn't.

Jon

Jonathan Kirwan wrote:
> But focusing back on why I said anything at all, I just prefer not to
> conflate what *is* clearly a real loss-leader with what isn't.

The way I look at it, I paid them $99 for a compiler upgrade and couple 
of software modules.  They are shipping me some additional hardware that 
I don't care much about.

I don't worry too much about the why's of product pricing anymore.  The 
marketeers and business wonks are supposed to be professionals.  If they 
underprice their product and go out of business, it'll just make them 
smarter the next time around.  Trust Darwin.

Kelly

On Fri, 15 Jul 2005 01:26:47 GMT, Kelly Hall <khall@acm.org> wrote:

>Jonathan Kirwan wrote:
>> But focusing back on why I said anything at all, I just prefer not to
>> conflate what *is* clearly a real loss-leader with what isn't.
>
>The way I look at it, I paid them $99 for a compiler upgrade and couple 
>of software modules.  They are shipping me some additional hardware that 
>I don't care much about.
>
>I don't worry too much about the why's of product pricing anymore.  The 
>marketeers and business wonks are supposed to be professionals.  If they 
>underprice their product and go out of business, it'll just make them 
>smarter the next time around.  Trust Darwin.

There is that!  ;)

Jon