Friday, September 15, 2017

On CPE Cost

When it comes to the cost of hardware, volume matters more than anything else. To large extent, volume matters more than everything else put together. A cost efficient hardware design produced in low volume will be considerably more expensive than an inefficient and sloppy design produced in high volume. Plus, for a high volume product, the Contract Manufacturer will have engineering teams to help tighten the design for a moderate fee.

If your own sales volume is sufficient to get deep volume discounting, you can stop reading now (more honestly, you aren't reading this in the first place). Otherwise, if you are building a product for a new market or you are building for a niche, read on.

What does this mean? It means you should work very, very hard to use hardware which is produced in high volume. The compromises you would make in terms of RAM or other capabilities in order to get your own custom design down to a price you can tolerate will cost you far more than you saved in terms of updating the software and capabilities throughout the service lifetime. Using an existing, high volume design may bring other compromises, but it is a good tradeoff to make.

If you want to have your branding on the box: many commercial off the shelf (COTS) devices are available in unbranded white-box versions. It is simple and easy to add silkscreening or design flourishes, often a one-time design fee and a tiny line item on the Bill of Materials.

If you want to add RAM, Flash, moderately faster CPU, etc: most of those white-box products allow customization of specs which do not require changes in the board design. RAM and Flash suppliers offer different capacities in the same pinout, and CPU vendors offer multiple speed-bins of their chips. There will be a sweet spot in the market where the industry is buying the most volume, with a reasonable standard deviation such that you can moderately increase the capability without substantially increasing the cost. The converse is also true: moderate reductions in RAM/Flash/CPU don’t substantially decrease cost and may not be a good tradeoff.

If you want to have a unique industrial design: many ODMs will customize a product for you, including a new casing. It will need to fit the existing board, and will cost a few hundred thousand dollars for design, tooling, and emissions testing, but that is still cheaper than taking it all on in-house as you get the volume pricing for the board and other components.


  • Mobile ate the world. You shouldn’t shy away from using mobile chipsets, even if your product will never operate on battery. Volume drives cost down, and mobile has the volume. Also, mobile chipsets with good power management are less in need of active cooling, and fanless is a huge win for consumer products.
  • RAM does cost money, but RAM is your future proofing. Greatly reducing RAM to lower cost is usually a bad tradeoff. Raspberry Pi Zero has 512 MBytes of RAM and costs US $10. Moderate amounts of RAM do not add much cost.
  • Many modern CPUs have configurable endianness, but seriously: little endian won. I hate that it won, but it did. If you’re considering a big endian toolchain, think carefully about the life choices that led you to that dark place. You’ll be taking endianness bugs onto your own plate for no benefit.