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>that pushes the cost to over $2,000 per device. Sounds like a market that is ripe for disruption. $2,000 cannot be remotely close to the cost of production.
by downandout 11y ago
>that pushes the cost to over $2,000 per device.
Sounds like a market that is ripe for disruption. $2,000 cannot be remotely close to the cost of production. This price is the result of having a small, wealthy customer base that is required by law to purchase it. If someone introduces one with pricing that reflects both the cost of production and a dramatically expanded customer base, that company will make a ton of money.
- cmdkeen 11y agoJust like medical devices or military hardware don't cost X to manufacture the cost is in the degree of certification required. Your MVP might look like it does all the same stuff but it is about proving things like mean time between failure, climatic conditions it can operate in etc.
- downandout 11y agoIn this case, any up-front costs, such as certification and R&D, can be amortized over each unit sold in the dramatically expanded market. If the market suddenly goes from a few thousand units per year to a few hundred thousand, the contribution that each unit sold must make to recoup up-front costs gets very close to zero.
- tankenmate 11y agoThe cost isn't only about "production" per se; the increased cost also comes from meeting regulatory, reliability and testing requirements.