@Paul: Right now I think the reservations stem form a lack of history. Basically, key people that I work with are unwilling to stray from the tried and true. For example, Freescale has a line of processors marketed as "automotive certified", and our customers are familiar with them. I have not yet dug into the intricacies of what "automotive certified" means. I imagine it has to do with a lot more than temperature range.
Any product that we launch with the propeller will most likely aftermarket, at least at first.
Just as a side note: For some of our product, startup time is important. It takes quite a while for the Prop to copy everything from EEPROM and begin execution. It would be nice if somehow I could force that initial copy to happen at 80MHz.
BTW:· This is getting way off topic, so I probably won't discuss it anymore here.
I can answer the question with an explanation.·Maybe I need an economist·handy. . .
First reason. The cost per Propeller chip is significant due to large die size and low manufacturing volume (relative to big market 32-bit controllers). We also do not use external funds to fund the business, which may have one drawback as well that relates to our Propeller unit cost. Market development funded by company-generated revenue occurs only at the rate we can create it from our own income. Only after we sell chips and other products do we reinvest in sales-related efforts and have the ability to lower our costs. While our approach produces a stable, reliable customer base with people like you, most chip suppliers you know have substantial capital for sales forces, FAEs, etc. Their·model can quickly produce high-volume sales. Higher volumes put a fabless company in the driver's seat for choosing a foundry, and enable lower unit costs for those who have foundries. We're not there yet.
The second reason that you don't see significant drops in the·the 1..100..1000 unit price relates to our customer profile. At present, Parallax customer base is an even distribution among education, hobby and commercial/industrial. At least half of·this customer base (hobby and education) buys an assortment of products from us, but not 1,000 of anything.·They are large in numbers, but·they place lower dollar orders. We must derive·income from their lower-volume Propeller purchases simply to stay in business.·We have two customer types that·buy·Propellers: the hobby/education and the volume user.·We try to create prices that allow us to generate revenue from both customer types.
Third reason: fixed costs of handling any sale are probably $50-100, particularly when dealing with QFN and QFP parts in trays. Oh boy! Packing up MSL-3 chips with bags and trays takes some significant time to do correctly, not to mention that we carefully track lot numbers and date codes even though there have been no changes to the die.
This·business model·should·provide reliability in long-term supply, quality technical support, and more valuable customers in the long term. But it also means·the prices don't drop until you hit the 1K mark for now.
There are other business models, I'm sure, but this is the way prefer to operate.
Something like that. . .
Ken Gracey
Parallax, Inc.
Post Edited (Ken Gracey (Parallax)) : 5/20/2008 9:26:59 PM GMT
Ken Peterson said...
Just as a side note: For some of our product, startup time is important. It takes quite a while for the Prop to copy everything from EEPROM and begin execution. It would be nice if somehow I could force that initial copy to happen at 80MHz.
BTW: This is getting way off topic, so I probably won't discuss it anymore here.
I have some questions about that so started a new thread -
Comments
Any product that we launch with the propeller will most likely aftermarket, at least at first.
Just as a side note: For some of our product, startup time is important. It takes quite a while for the Prop to copy everything from EEPROM and begin execution. It would be nice if somehow I could force that initial copy to happen at 80MHz.
BTW:· This is getting way off topic, so I probably won't discuss it anymore here.
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I can answer the question with an explanation.·Maybe I need an economist·handy. . .
First reason. The cost per Propeller chip is significant due to large die size and low manufacturing volume (relative to big market 32-bit controllers). We also do not use external funds to fund the business, which may have one drawback as well that relates to our Propeller unit cost. Market development funded by company-generated revenue occurs only at the rate we can create it from our own income. Only after we sell chips and other products do we reinvest in sales-related efforts and have the ability to lower our costs. While our approach produces a stable, reliable customer base with people like you, most chip suppliers you know have substantial capital for sales forces, FAEs, etc. Their·model can quickly produce high-volume sales. Higher volumes put a fabless company in the driver's seat for choosing a foundry, and enable lower unit costs for those who have foundries. We're not there yet.
The second reason that you don't see significant drops in the·the 1..100..1000 unit price relates to our customer profile. At present, Parallax customer base is an even distribution among education, hobby and commercial/industrial. At least half of·this customer base (hobby and education) buys an assortment of products from us, but not 1,000 of anything.·They are large in numbers, but·they place lower dollar orders. We must derive·income from their lower-volume Propeller purchases simply to stay in business.·We have two customer types that·buy·Propellers: the hobby/education and the volume user.·We try to create prices that allow us to generate revenue from both customer types.
Third reason: fixed costs of handling any sale are probably $50-100, particularly when dealing with QFN and QFP parts in trays. Oh boy! Packing up MSL-3 chips with bags and trays takes some significant time to do correctly, not to mention that we carefully track lot numbers and date codes even though there have been no changes to the die.
This·business model·should·provide reliability in long-term supply, quality technical support, and more valuable customers in the long term. But it also means·the prices don't drop until you hit the 1K mark for now.
There are other business models, I'm sure, but this is the way prefer to operate.
Something like that. . .
Ken Gracey
Parallax, Inc.
Post Edited (Ken Gracey (Parallax)) : 5/20/2008 9:26:59 PM GMT
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I have some questions about that so started a new thread -
http://forums.parallax.com/showthread.php?p=727478