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How Much Will It Cost to Have a New Electronic Product Developed in Asia?
This is another question we get
rather frequently. The short answer? It depends.
Some clients require the full
range of our services, while others may have already had some of these done in
their own country, like for instance the industrial design work. Regardless of
what stage you're project is at, one thing is certain: you can expect
significant savings having your device not only manufactured in China or
Taiwan, but also developed here.
Consider the graph below
comparing design, development, and manufacturing costs in the US and Taiwan for a
typical custom embedded device featuring an LCD screen. From
this example, you can see that savings of over 50% are achievable.These
costs already include the management of Titoma, to make sure that the various
component suppliers, mold makers, hard and software engineers communicate with
each other effectively, and above all: deliver according to YOUR expectations.
Costs will of course heavily depend on the complexity and
size of the product. For a simple small gadget, Titoma's budgets to do
everything needed start at $35,000 of Non-Recurring Expenses (NRE),
which includes engineering, mold making (for the housing of the device),
prototyping, and certifications. Larger products with a lot of
programming run in excess of $100,000. And, if you haven't already
heard, volume is king in China, and few factories in China are willing
to take orders below 5,000 pieces. At Titoma we realize that especially
on shorter run products the NRE investment weighs heaviest, so we also
help our clients do lower quantity projects, as long as the first order
is worth at least US$50,000.
But, despite the savings of
having development and manufacturing done in Asia, the capital needed to
develop a new product can still be significant considering it may
involve most or all the following: - Industrial Design
- Mechanical Engineering
- Electronics Engineering
- Firmware Programming
- Software Programming
- Prototyping
- Certifications
- Tooling/Mold Making
- Manufacturing
- Packaging
And
of course aside from development and manufacturing costs you also must
take in consideration the cost of shipping the goods (generally about 5%
of value), VAT tax in your home country, trade shows and marketing,
etc. With all these costs, it's a wonder why anyone would want to
develop their own product!
But they do.
The Silver Lining
We've
been in this business long enough to know that the success of a product
doesn't depend fully on a single good idea. Product development is
about fitting all the pieces of a puzzle in just right way. If one piece
doesn't quite fit, the whole project fails. But once everything fits
into place--and at just the right time, mind you, especially since the
market window in electronics can close quickly--then the rewards
are frequently considerable.
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would take German engineers forever to design,
test and debug the electronics. A much quicker approach is to work with an
Asian mouse maker and simply to re-layout one of their standard
boards to accommodate the extra functionality of, in this case, an additional
joystick. We had a working prototype ready in 2 weeks. This approach not only
saves time, but money as well, since you can profit from the economies of scale
of a factory producing 2 million mouses per month. The trick of course is to
get across to the factory what exactly it is you need while avoiding as much as
possible the risk of copying. Over the 10 years Titoma has been around we have
developed a lot of systems to accomplish this, see 
