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In my mind, they failed to miss their crowdfunding target because of a poorly coordinated campaign. 1) lack of tiers - t shirts came way too late. They should

In my mind, they failed to miss their crowdfunding target because of a poorly coordinated campaign. 1) lack of tiers - t shirts came way too late. They should have added phone docks and exclusive first preview to their convergence. 2) pricing - the sweet spot for the pricing was about 650. they priced the product way too high

grey-area 13y ago
the sweet spot for the pricing was about 650. they priced the product way too high Price versus demand is not the only constraint here. It is an incredibly ambitious piece of hardware, so obviously more expensive to produce than say the iphone 5. The iPhone 5 costs $849 for the 64GB model. That's half the memory, and more expensive than the Ubuntu edge even at these higher price tiers. Unfortunately most people will probably compare the subsidised price from a carrier instead, or cheaper hardware. Just because they could sell more doesn't mean it would initially be cheaper for them - there might be constraints imposed by their choice of supplier, who can only handle a certain volume of a new experimental device for the deadline. There are a lot of setup costs involved, and the greater the volume they sell, the greater the risk - many kickstarter projects have run into this issue - what is easy to do for a run of 10,000 just won't work for a run of 1,000,000, and if they had problems in their first batch, it could lead to serious damage to their brand if they have a huge userbase angry and waiting for hardware. So plenty of reasons for wanting to constrain supply. So from Ubuntu's point of view, perhaps keeping the production run small was a requirement - that would explain the higher price tiers, because that imposes a higher average cost on them per device. They're probably making a loss on a $600 sale given this is a new device and the specs. Without knowing the demand curve in advance it must be quite hard to judge, but if nothing else I guess this campaign will give them a very good idea of the demand curve for a phone like this, so they will at least get that out of it if it fails.
- seferphier 13y ago
  I agree with your points. I think to succeed they need a higher kickstarter goal to have the economies of scales. honestly, i foresaw that ubuntu edge would fail when they introduced the new price tiers. If all the discounted price tiers would have sold out it would have generated a few extra million. Once those are sold out - the people would not buy a $825 phone and the campaign would be stuck I would relaunch the campaign after knowing the elasticity of the curve.

grey-area 13y ago

the sweet spot for the pricing was about 650. they priced the product way too high Price versus demand is not the only constraint here. It is an incredibly ambitious piece of hardware, so obviously more expensive to produce than say the iphone 5. The iPhone 5 costs $849 for the 64GB model. That's half the memory, and more expensive than the Ubuntu edge even at these higher price tiers. Unfortunately most people will probably compare the subsidised price from a carrier instead, or cheaper hardware. Just because they could sell more doesn't mean it would initially be cheaper for them - there might be constraints imposed by their choice of supplier, who can only handle a certain volume of a new experimental device for the deadline. There are a lot of setup costs involved, and the greater the volume they sell, the greater the risk - many kickstarter projects have run into this issue - what is easy to do for a run of 10,000 just won't work for a run of 1,000,000, and if they had problems in their first batch, it could lead to serious damage to their brand if they have a huge userbase angry and waiting for hardware. So plenty of reasons for wanting to constrain supply. So from Ubuntu's point of view, perhaps keeping the production run small was a requirement - that would explain the higher price tiers, because that imposes a higher average cost on them per device. They're probably making a loss on a $600 sale given this is a new device and the specs. Without knowing the demand curve in advance it must be quite hard to judge, but if nothing else I guess this campaign will give them a very good idea of the demand curve for a phone like this, so they will at least get that out of it if it fails.

seferphier 13y ago
I agree with your points. I think to succeed they need a higher kickstarter goal to have the economies of scales. honestly, i foresaw that ubuntu edge would fail when they introduced the new price tiers. If all the discounted price tiers would have sold out it would have generated a few extra million. Once those are sold out - the people would not buy a $825 phone and the campaign would be stuck I would relaunch the campaign after knowing the elasticity of the curve.