The C.H.I.P. from Next Thing Co. bills itself as the world’s first nine dollar computer. That’s not a lie; their Kickstarter took in over two million dollars for a tiny single board computer with composite Video, WiFi, Bluetooth 512MB of RAM, 4GB of storage, and a 1GHz CPU. That’s a complete computer, sans keyboard, mouse, and monitor. You won’t get that with the $35 Raspberry Pi – you’ll need to add a WiFi adapter and an SD card for the same functionality – and you won’t get that with any other single board computer.
Understandably, the C.H.I.P. is already extremely successful. The company behind it has about 50,000 pre-orders, and people lined up to wait until well into next year for this computer. Exactly how Next Thing Co. managed to build a single board computer and send it out the door for nine dollars is a question that has yet to be answered, and is leaving more than a few people puzzled.
The Olimex blog has given their opinion of the C.H.I.P, and if that’s to be believed, the news isn’t good. The guys at Olimex know their stuff when it comes to making cheap single board computers; they have more than a few for sale, and they know what the Flash and DRAM market is like. To them, it’s impossible to sell a computer like the C.H.I.P. at $9. A quote from Allwinner for a similar module is $16 at the quantity Next Thing Co. would be looking at. That’s just the module with RAM and Flash – no Wifi, no board, no connectors. How could it be possible to sell this computer for only $9?
Anyone who has ever seen a Kickstarter campaign can give you an answer. The C.H.I.P. is a loss leader to build a community. Once the C.H.I.P. is shipping, the community becomes the product. The low price point is a classic technique to build excitement for and a community around a project. There are hundreds of fully funded projects tucked away deep on Kickstarter that prove this point.
From a business perspective, the C.H.I.P Kickstarter doesn’t even make any sense. The original goal for the C.H.I.P. Kickstarter was only $50,000. If a business that is already shipping hardware can’t find an investor or take out a loan to cover the development of a new product, one of two realities are necessarily true: either the product is an impossible pipe dream that no investor or lender would consider, or Kickstarter itself is a marketing tool to build a community.
Next Thing Co. disagrees about Olimex’s $39 claim. In their latest campaign update, they say C.H.I.P. will still be $9 when pre-orders open up. As far as Next Thing Co. is concerned, they’re unfazed by the conjecture of their competitor. [Thomas Deckert] of Next Thing Co. says, “I can tell you there is at least one significant error in that post by Olimex.”
The basic idea of C.H.I.P. is to leverage off the shelf components – the kind you’d find in cheap Android tablets and value line smart phones – put them on a board, and get a Linux distro running. That’s the basic premise of the Raspberry Pi, and that’s the idea behind dozens of other single board computers available today. No company has ever done it for nine dollars. If you take them at their word, that’s what Next Thing Co. will be delivering. Exactly how they’ll be doing this is anyone’s guess, and once these tiny, cheap computers start shipping, we’ll probably learn a lot about supply chains and what’s actually available from those fabulous chip manufacturers. Until then, it’s anyone’s guess.
110 thoughts on “Olimex Claims The World’s First $9 Computer Costs $39”
Great write up! Likely spot on. The real trick will be selling the cow after it’s been milked dry…
When I checked in on this, it seemed like a substantial percentage of people were spending an additional $20 (or thereabouts) for the video adapter as well. *That* is where they are making all their profit.
Correct. I figured all along that the core computer, the C.H.I.P was a loss-leader, and the peripherals would be where they made money.
But I say, “SO WHAT?!” It’s their business, and I’m interested in the product, so I don’t care about their pricing policies. I still buy groceries at stores that have certain products advertised on “sale” as loss leaders. Again, it’s just their pricing policy. I get what I want at a price I am willing to pay, and they get to keep their business running. Everyone’s happy.
Olimex, check your envy meter.
Maybe its going to be run like the Smartmaker campaign that was ran on indiegogo
$9 ARDUINO – raised $164,401USD, raised by 4,299 people, delivered.
BE MAKER! KIT – raised $248,116USD, raised by 4,299 people, not delivered ??
BE SHIELD -raised $42,147USD, raised by 902 people, not delivered ??
A Harold Timmis and Dimitri Albino special, Indiegogo seems to have washed it hands on a resolution. Last project closed funding maybe end 2013….what happened to the $280k money??
There seems to be a few campaigns that are attracting the FTC…..
Edit : First campaign was 7,018 funders.
Yeah, there have been so many scams I don’t even bother to consider any of these any more. I’ll gladly pay a few extra bucks once they are a stocked item I can order at-will.
Also, given the time generally required to learn all the ins and outs of these systems, I’m simply not going to invest any of my time until I can order multiple additional units on-demand.
Arduino started selling their MEGAs at a loss leader price to create an ecosystem. Oh wait, never mind, they are still $50 and pretty much have always been. Chinese copies are $15 or so now.
Yeah but you have to realize that those cheap Chinese ones don’t use concentrated yak tears for the substrate.
Chinees copies are (sadly) very bad quality stuff we found out at Ultimaker.
We shipped our first 100 machines with a certain off-brand ArduinoMega2560. Problems came up, a year later none of those where running. While most of the official Arduinos are still running.
Still, they are expensive if you look at just the production costs of a simple board like that.
Never had any problems with my Chinese clones. And at the price difference you can afford to have a dud occasionally, anyway.
EA .. DLC.. DLC… DLC…
jesus. you guys are such cynics. i had the alpha version of this a few months after your shitty comments and it was great. the final product is great. it’s $9 like they said it would be
I wonder if it matters if the board ends up costing more? As long as it is delivered to early-adopting Kickstarter backers at the advertised price and close to the timeline I think it’s a success. But that is where Raspberry Pi has shined… sticking to a low-price point and upping the specs as more inexpensive RAM and faster processing is made available. That to me seems like a tough act for CHIP to follow but I do hope it’s possible.
But who exactly got it for the $9? Anyone with free shipping here?
Good point. Let’s wait for the shipping cost…
They want to charge me $20 to ship it to Europe. I want to buy 5 or 10 and then maybe pay $30 in shipping. But they won’t allow that. (kickstarter rules say I can’t buy more than one, NextThing refuses to add a 5-pack or 10-pack).
Ditto. I’ll wait til someone has it in stock, thanks.
“As long as it is” being the key here.
I don’t think the $9 chip comes with HDMI. It comes with composite video out
You’re right, the HDMI is an add-on board. I’ve updated the post to correct that. Thanks!
But what is on the addon board. Is it passive? Just an adapter that goes from pins to an HDMI socket? Or is there a chip on there that actually generates the HDMI signal?
If the former then I’d still call it a $9 computer. So you need an adapter? If you really needed that computer to cost just $9 you could cut the end off an HDMI cable and solder it to the pins. (not that I would recommend that).
If the latter then I am curious how that works. Is it like adding a second video card into a desktop PC? It’s Linux right? Would the operating system see a second video adapter? Could this along with the composite output be used in dual headed or multi-seat applications like two video cards in a PC can? Actually, I guess I could ask that question either way.
There are definitely chips on the HDMI and VGA breakout boards. But you can still call it a computer with native composite video. I can think of tons of uses for this as a headless system.
As discussed in (one of) the previous post(s) on the CHIP, the HDMI board is a parallel LCD => HDMI adapter with a chip on the board handling that conversion.
Sounds like the SOAP router.
By chance did the people from Next Thing come from Netpliance? Sounds just a lot like the I-Opener.
lol! I still have an iopener in a box, somewhere, that I hacked to swap alternate pins for the IDE drive. wow, memory lane, indeed! ;)
(anyone want an iopener? I don’t need mine anymore, that’s for sure. has not seen the light of day for a decade or so, now. I think the chip was upgraded to a p1-200 cpu, socket7 iirc?)
Happy to send it to germany?
What would you like for it, I think I have a home for it…
Larry in OKC
Oh ok, I didn’t need it desperately.
Hah! I have one of those as well… also modded for a hard drive. It ran Linux, mostly serving child’s educational apps.
Yes its $9, but you have to spend $29 to get it.
Well, here in europe, the raspberry pi is supposed to cost 35 dollars but we pay 49 euros for them. Also, this board is just amazing !!! Unlike the stingy raspberry pi makers, they will make it FULL OPEN SOURCE !!! This means any chinese company can make them if they think they can do it cheaper and they can even upgrade them if they wish. This adds a whole lot of options like custom boards with custom wireless chips or better processor or whatever they want to add.
These guys have a pretty big manufacturing task ahead of them. 4 different PCBs to create a manufacturing process for including test fixtures, etc. Assuming that they really were planning for the scale that $50k implied then things are going to be very different at $2M. I guess the good news is that these kinds of boards are fairly standard stuff for a lot of assembly houses.
It’s too bad as part of the openness the claim they espouse that they won’t break down their costs. As a maker, it would be interesting to see where the $9 goes.
The VGA and HDMI boards are trivial: if they’re not built a few weeks after starting, that’s just silly. Both are almost certainly just 2 layer boards, and the component count is negligible.
If something sounds too good to be true, it probably is. Since whether or not you pre-order, you’ll have to wait for a long time, might as well wait for the full production. It never pays to buy preproduction things as there bound to be bugs.
Considering the article says “and send it out the door for nine dollars” for something that hasn’t been sent to backers yet, it could just be a complete rip-off like some past “too good to be true” Kickstarters. They could cut-and-run, or spend all the money on coke and hookers then declare bankruptcy.
Okay, this is very optimistic. It looks like the C.H.I.P team is at least 7 people. If they want to make a decent salary, say just $50K per year each this adds $350k/year + $25k/year employment taxes. If they want a building instead of there gurage add another $18k. Phone, internet, gas, electricity, tp, maybe another $6k/year. Insurance, product liability, accounting services, yada, yada, yada. That works out to about $400k/year. If they can build a $9 computer and they only make $1 per computer they will need to sell about 400k units a year to break even.
Maybe the thing that is missing is that they charge $200/hour for support?
No, the missing part is that this is just a marketing campaign and the real money comes from elsewhere. $50k wouldn’t be enough to even pay for the components …
The price will either go up or they hope they will be making up the losses on the extra add-on boards – good way to go broke when the Chinese cloners start selling “compatible” boards for half price. The $20 shipping also helps …
I think that’s the winner in this debate, they are selling at a loss to make up the money in shipping and cheap accessories. Lets hope that works out for them, although with close to $2million raised, I guess it has :)
They probably don’t have to pay a Kickstarter cut on shipping, so they sell $24 of computer with $5 of shipping at $9 + $20 shipping.
The CHIP team is in California. At a salary of $50k in California, you are living in a cardboard box under a highway overpass eating crumbs out of candy wrappers discarded by the drivers passing above. These people are otherwise funded for their personal needs.
“I can tell you there is at least one significant error in that post by Olimex.”
$20 shipping to Europe. I really think thats the key.
meanwhile, shipping from hongkong on $0.99 items, free.
You forgot the “other” Kickstarter business model – take the money and fail to deliver. I’m sure I’m not the only one who has funded one of these (in my case the Agent smartwatch).
Secret Labs is still trying to deliver, LOL – ” Estimated delivery: Dec 2013 “
Smells like FUD from a competing manufacturer. You can get Android-based TV dongles right now with WiFi, Bluetooth, more RAM, more storage, and a newer and faster CPU for much less than $39 shipped. Even they admit that the price Allwinner quoted them is far too high to be the actual price for the R8 – I suspect it’s their way of subtly telling Olimex they’re not interested in selling to them in bulk right now.
PLus, i am sure they will quote different price in same conditions depending where you are from.
Yeah, I totally agree. I’ve always thought that Olimex was overpriced and it feels like they are trying to justify their markup by pissing in someone else’s sandbox.
Wouldn’t call it exactly FUD as they mentioned their sources and how they came with the figure. While the Next Thing Co. doesn’t help its case too much as they failed to address shipping cost issue during the kickstarter campaign. There is no evidence (except issues with sustainability) that CHIP it is in fact $9 platform. As Olimex noted they didn’t even get into looking at prices of wifi chip, which is stated to be ~$3 at alibaba.
The 39$ figure came from Next Thing Co thru Allwinner according to Olimex. The plan probably changed as I doubt Next Thing Co. would make promises to deliver CHIP for 9$ in future if it didn’t, but the question remains where the money will come from then? will overpriced expansion boards will be enough?
P.S. Please note HDMI has some royalties which would explain expansion board price. But then again – what about CHIP board? Wifi&Bluetooth also requires $$$.
Erm, they HAVE addressed the shipping costs. They have arranged a cheaper shipping method and will convert the excess pledged amount into store credit for backers.
So now the $9 computer will not cost me $29, but only $25. Great!
Not really. Many of the Android sticks you see on amazon etc are surplused product from earlier generations – or they’re constructed of surplus parts. Hell, I used to work for a company that kept the production line for its product running with components salvaged from retired pachinko machines (apparently Japan has strict laws about how long you can allow gaming machines to operate before they have to be taken out of service). You can keep redesigning the interior of a product to take advantage of spot market surplus pricing on components as long as the exterior and the basic specs stay the same, but it’s not a sustainable model for something where the innards have to remain stable because developers are writing code to the bare metal.
I, like Olimex, am deeply skeptical of the $9 price point. It’s like those “Indian government announces $15 tablet computer to be given to every schoolchild” projects that pop up roughly annually. Big hype, press pics with toothy smiles, fine print saying “currently $80, projected to reach $15 after fortuitous meteorite strike converts entire beach into VLSI-grade silicon ingots and Chinese government goes bankrupt”.
FD: I backed for a single unit at $15 shipped.
I wish they hadn’t advertised it as a “$9 computer.” This thing really should only ever be used headless for IOTish applications.
Hopefully no one is surprised by this. I backed the C.H.I.P. knowing that when (or if) I got my backer reward, there’s no chance in heck that the next one I buy, after the Kickstarter campaign, is over, will be at that price.
If they really are selling this as a loss leader to build a community (which is my personal belief), I think that’s a perfectly valid business model. Sell a lot of these things to early adopters, get a community up and running, get projects out into the hacker community, and show how useful it is. Even if they later retail at $20-25ish, a flourishing community with practical applications will probably support that business model.
Not every Linux project requires video output. I think the C.H.I.P. is likely to be a very useful product and worth (potentially) whatever the post-Kickstarter price will be.
Why this is even an question today?
Of course they “purchased” free ad time with that 9$ price cheating. The postage prices contain the rest of the costs. And maybe some are not covered but that goes to marketing costs (which are free since every blog is advertising them).
There are plenty of cheap “computers” available. Move on. No need for 9$ computers or cheap 3D printers. Buy cheap, buy twice.
So.. From the first post of the $9 computer it was obvious they are making up the loss elsewhere – shipping, accessories, etc. It looked very unlikely their team would be making much profit from ‘the $9 computer’.
One thing to know is that this group is taking part in the Shenzhen incubator – whatever it is called. They are in Asia, working with local businesses. They also may have corporate partners they are not telling us about, such as Allwinner itself, who is apparently involved in the shenzhen incubator.
Further, Olimex is somewhat unrelaible a source for this information. As others here note, there are products with similar specs that sell for less than the “$39” estimate (what is with business men and the number 9?)
Anyway, If the SOC module is actually $5… They still cannot make any $ this way, but perhaps they can if the module is actually at cost, manufacturing help is coming straight from Allwinner, and they have secret startup funding they havent mentioned.
If there is not direct involvement and investment from Allwinner, to me this looks like it could actually be the beginning of what turns into a 16 month long scam.
Done right, you could run this as a scam and come out with reputation IMPROVED. Yep.
Furthermore – 1 year lead time on some PCBs? Who the heck is ordering these things? In a year, there will be MANY of these type of products.
Maybe the “Shenzen incubator” is actually a PLA black hat project to build advanced semiconductors and assemble electronics in an underground complex staffed entirely by political prisoners and their children, and this is simply a pilot project. I mean, absent any actual information, this theory is as plausible as any of the others, right?
And embedded in the silicone is a tiny receiver set to burn the chip with a specific signal is received. Thus by flooding the market with cheap chips they can then disable western world and take over :)
Actually – Kudo to T.I.Wade for this idea – it’s in his novels.
Thought PLA in your comment meant programmable logic array until I found out about the other PLA of China.
Olimex estimates the BoM cost of C.H.I.P should be close to $20, so that means they may be losing around $10 for each board sold. So the $9 was mainly for marketing purpose, but a potential issue is that it worked on they raised over $2 millions, and “we sell at a loss, but we will make it on volume” does not really work in real life. So does that mean the campaign is at risk as Next Thing Co. may not have enough funds to manufacture the board? Not necessarily, as many backers also pledged for accessory boards (HDMI adapter ,VGA adapter, and others) which are likely to have a bigger margin, and the average pledge is $52.37, so they might even be able to make some profits. But if money is tight, delays might be likely.
Read more: http://www.cnx-software.com/2015/06/07/allwinner-r8-module-datasheet-and-price-is-the-9-c-h-i-p-computer-selling-at-a-loss/#ixzz3cmk2z3dP
2 million in investment for something we already have too many of.. If you actually had a design for something needed and original I bet you wouldn’t get a hundred bucks off these free-money sites..
I picked up a pcduino lite wifi for 26 bucks with 265, 1ghz 2gig rom and wifi on sale, so its not “the only” sbc with more features than a pi, fact I recently got a pi and was reminded on how spartan that little thing really is
if the chip people can pull it off I would gobble these things up cause not having to fish around for a sd card just to see the darn thing turn on, and string a network cable heavier than the stupid board really does spoil you
Razors and blades, like how the socialist, anti-capitalist, anti-military entrepreneur capitalist King C. Gillette made his fortune selling razors at a loss and a large profit on the blades – to the US Army during World War 1. He didn’t let a little thing like being a massive hypocrite stand in the way of becoming a very wealthy person.
I’m actually betting they made a trivial cost error, or someone internal wants to try for higher profit..
This is why, in my opinion, these give-me-free-money sites need standards.. Most people, especially in the US, have so much disposable income they basically make bad investments like randomly buying and donating on the internet..
“I can tell you there is at least one significant error in that post by Olimex.” OK, what was the channel this writer used to get the quote? And no one asked the obvious follow-up, like what that supposed error is? Really hard to give their response credibility if they won’t provide details. Or if asked, got no response in a reasonable time?
To brush off the losses to marketing is pretty silly though, that’s very expensive marketing. If the BOM estimate is real, that’s quite a bit sunk, assuming they do fulfill.
The average pledge is around $50 (according to someone who did the math a bit higher up). Even if they don’t make money on the $9 computer itself, THAT is the important scale where you need to turn a profit.
$9 for a small SBC means that the board is being made at a loss for marketing purposes. But this is not new most low cost evaluation boards such as TI’s Launchpads and ST’s NUCLEO’s are sold at a loss. Next Thing Co (probably just a front for AllWinner) is basically following that model somewhat agressively. Having said that i do believe that these boards will eventually be delivered and the $9 price will remain after the kickstarter campaign ends.
For starters Next thing Co is probably heavily sponsored by AllWinner. This sort of thing can grant AllWinner more design wins in western markets as it tries to compete with the likes of Broadcom, FreeScale, TI, amongst other ARM SOC companies. Basically cheap sells…just look at how much excitement and news keep being generated around the $3 WIFI esp8266 chip despite it not being the most refined nor power efficient solution out there.
Also they’re selling the boards without hdmi or ethernet. Those that want those end up paying extra especially if you want that portable computer shell with LCD and mini keyboard e.t.c. I’m sure that they’ll recuperate some of their losses via these accessory boards.
The boards do come with WiFI and Bluetooth which in my mind are more critical than hdmi or wired ethernet in this IOT world.
And finally there’s the shipping. $20 shipping on even 30% of all orders made would go along way to compensating for any manufacturing losses incurred. Hopefully once they’ve ironed many of the bugs out of the manufacturing and logistics, they’ll be able to reduce shipping costs.
That $3 for the ESP8266 gets you an FCC certified module. The actual chips are under a dollar by the reel. Competing FCC modules run $15-30. And yes, those modules ESP8266 are on Aliexpress for $5, but that’s because they are ‘free ship’.
Allwinner is fabless. If they seriously threatened a first tier player in western markets, their fab partner would only need to up the production cost a penny a unit and Allwinner would be over.
Well, on another product, but one that will make sense to everyone. I can buy a PIR sensor that draws less than 100uA, has a sleep mode and multiple triggering outputs for 99 cents on Ebay. I work as a Senior Electronics Engineer. I took one look at the sensor and knew you could not source the sensor alone for 99 cents.
I put our patent attorney on it, and basically after he some searching, it came down to this. Bring one or two into the country, so be it. Design a product around it and there are patents out there by some very large companies and unless you pay royalties, your Chinese sourced and built product will be stopped at the incoming port and will suffer the same fate at the Atari 2600 E.T. cartridge.
Why isn’t Leviton or some other company selling a PIR occupancy sensor switch for 2 bucks when a simple on / off manual switch is 19 cents in volume? Patents, royalties and lawyers. When we pressed our Chinese sources further, on whether or not we can get fully built PIR modules for 99 cents?
Uh…no, but if we say it is a shipment of toys, or something else, well every cargo container we can get through, we can. Then we can be put on a black list and every one of our containers will be inspected, thereby making the 99 cents PIR sensor fully built a pipe dream. Until the patents run out which is coming up, then we can flood the market.
I think it is great that you can buy this thing off of Ebay and dream, but when there are patents in place, you have to pay the piper or else. I am not against enforcing patent infringement. As long as it doesn’t stifle development. The reason LED lights are taking off is because all the big boys decided it wasn’t worth it and everyone who isn’t using their brain for skull stuffing cross licenses.
If something looks to good to be true on a large scale, it is too good to be true, as I have learned with almost 30 years of experience, remember TINSTAAFL. There Is No Such Thing As A Free Lunch. Since China is a member of the WTO but doesn’t have to float its currency, they can play fast and loose with accounting, for now, but in the end, all they do is bankrupt the competition and stifle innovation.
I don’t say this meaning to come off anti China. They are good at R&C, just not that good at R&D. Don’t believe me? Which country sent something into space that has now left the solar system? Which country has rovers on Mars that have performed well beyond their expected life? Which country sent a rover to the moon that died after 3 days?
If you build a product, I don’t know say something low tech like drywall, in China and ship it somewhere and it comes out it is defective, guess how it goes. The end user (home owner) sues the builder(s) in their home country and get payment. Builder X sues the Chinese company but has to do it in China, and will never see dime one.
Really, I am not anti China, but google this one. Type in “California-discovers-hidden-price-tag-of-outsourcing-Bay-Bridge-to-China”. I was talking with Engineers way back that said, “They can’t deliver quality product at that price period”. Since then? Well some of those same Engineers have told me that their customers are demanding high quality steel from anywhere other than China.
So a 9 dollar computer with those specifications? Not possible at this point. Period.
This is just slightly enlightened anti-Chinese hysteria. Nice of you to claim otherwise. I don’t know what a handful of US aerospace achievements have to do with China.
Which country developed largely on the back of violating existing IP law? (The US and China!) Who built the largest HSR network in the world, including the fastest long line train in the world, over a geographical area the size of the US? Who largely developed a full industrialized nation in under 30 years? Who grew to dominate the renewable energy (wind and solar industry) in less than 10 years? Who has passed everyone in the world except the US on high technology patent applications (and has already passed the US in semi conductor technologies) and will dominate the US by 2020?
I wonder if Allwinner is using it as a loss leader to popularize themselves and try to move out of the tablet market. The RaspberryPi didn’t make ARM successful by any means, but it certainly didn’t hurt it.
I watched broadcom stock price go up up up with the popularity of the rPi. It may have just been a coincidence, or it may have been the massive publicity rPi got..
People underestimate the cost of marketing. It is in no way a trivial expense – from trade shows to magazine ads to video production, and so on.
I cannot possibly justify it, but I estimate CHIP probably got a million dollars of exposure.
Broadcom has revenue near 9 billion a year and has chips, I’m betting that since the pi came out there has been a total of less than 20 million in revenue to broadcom on it over 3 years. Nobody learned the Broadcom name from the except maybe some kids in 4th grade.
Yeah, but the stock market is irrational and driven by marketing.
I strongly believe the rPi had a postiive impact on Broadcom stock price – and I also agree with you that it is unlikely to have been proportionate to their income from rPi.,
Marketing is SUPER EXPENSIVE and can even be hard to get at any price without the right connections.
Broadcom was basically unknown before rPi. Argue with that if you want, but outside the little nerd circles we travel in, no one knew who they were.
Literally thousands of articles were written about rPi.
Millions and millions of dollars of advertising.
You turned out to be mostly correct, thx.
Prior to their recent buyout, Broadcom has under performed S&P 500, NASDAQ, and virtually all of their competitors since the inception of RPI…
After some research, I have to agree with you in the end. I concede I was wrong.
Any idea why the price crashed in 2013? It looks like manipulation to me, so big investors could double their money, but maybe there is a good reason.
I also read that rPi has sold around 5 million units – whatever that is worth.
Quick ball-park rule of thumb. Quantity pricing for 1+ million a year is roughly 1/3 the quantity 1000 price and 1/6 the quanity 1 price from dsitributers likes Digikey, Mouser, Arrow, Newark, etc.
“Kickstarter was only $50,000. If a business that is already shipping hardware can’t find an investor or take out a loan to cover the development of a new product”
Has this guy ever actually tried to get a business loan?
For a start up, getting a $50K loan is nigh impossible. Hell, the bank told me I had to already be making $100K a year to get a loan for $10K and I’d have to pay it back in a month. How’s a start up that has just spent months designing a $9 computer and has no money coming in going to convince a bank to give them a dime? For that matter how would they convince an investor to invest in a product that has limited appeal and doesn’t already have a huge customer base?
Really, I’d love to know because I’ve been trying to get my electronics business off the ground for the last three years and the one thing which has been holding me back is a lack of funds.
They are part of a start-up incubator that took place in Shenzhen, a very active electronics manufacturing city.
There is some reason to believe they are a front for allWinner.
rPi was a guerrilla marketing campaign for Broadcom, and it worked EXTREMELY WELL.
Be prepared to see MANY copy cats.
I don’t buy this line of reasoning. The first product Next Thing Co. released was a camera powered by the Raspberry Pi compute module. If they’re a front for Allwinner, they could have used some Allwinner chips in that camera. Instead they go with the competition?
Good point . I havent deeply analyzed the claim they may be partnered with AllWinner. It just had some ring of potential truth to it.
I still believe rPi is basically a broadcom Guerrilla marketing experiment that worked extremely well.
For instance, it was made by Broadcom employees, was claimed to be open source but had several blobs, and so on. I still like rPi.. I just feel it was presented as one thing, while being another.. I can think of no better way to sell a development board than what rPi did.
I dont think not using only Allwinner parts reduces the possibility that there is some deep involvement in this. But you are right to reserve judgement, I am also.
I’m in for one – but I have a bunch of tiny little computers, many that cost thrice the $9. If it never shows up, so what – it was a better bet than $9 in scratcher cards, and it’ll be awesome when/if it shows up, after everyone moves onto the next bit Kickstarter circus and we’ve all forgotten about the mysterious C.H.I.P. Or, it’ll show up and be amazing, and we’ll all own even more $39 C.H.I.P.s next year. Pretty sweet odds, I think.
I do get curious how companies afford to dole out gadgets at ridiculously low prices, or what the angle is. That’s while I’m waiting in line to get a few of my own, of course. It’s not like CPUs die when the company runs out of money. We buy everything that’s awesome from China, the US, or anywhere else without prejudice, as long as that shiny new device can be had without an absurd shipping cost.
But to add fuel to the rumor mill, I haven’t been able to find any company records in CA or Alameda registered as “Next Thing*”… in the 10 min I looked. Maybe this whole Kickstarter deal is an expensive marketing campaign paid for by Allwinner to garner interest in a new IoT SoC, and win over all the hipster makers so Allwinner can stake their claim in the embedded land rush. Good thinking, great idea. I wish them luck – because if it catches on, it’s going to be after the hype is gone and they nurture those who remain into a real community. A community that won’t flourish if the company or hardware is full of hot air.
If you don’t want your $9 computer because you can’t figure out how it could possibly be real, I’ll take it. And a dozen $2 counterfeit WiFi SoC’s, a few 70% off Arduino’s from RadioShack, and whatever else I can scavenge from the forgotten devices in the garage. I’ll worry about the suppliers and chip manufacturers when I’m about ready to take my prototypes to Shenzhen.
Once we split the hairs, it isnt $9.
With shipping it’s $14. Still pretty good. And I know this trap. You’re going to educate me by once again repeating, “if you want something equivalent to to x, you’ll need to pay for the HDMI, laser, and better CPUs”. I’m not interested in making an x out of this y (and definitely have no interest in that awkward looking GameBoy McTubbers).
You can flip the argument both ways – if you take a Raspberry Pi 2, remove at least two USB ports, the audio connector, camera thingy, and everything else I don’t use, I could buy two of them for the same money. See, it’s not about making y just like x, it’s about how y i different from x that makes it interesting.
I’m looking at $14 out the door. Which, for a quite capable Linux computer that comes with WiFi and GPIO (right, right: *if* it ever comes) makes it tough to get all curmudgeonly, bitter and angry over.
i havent said any such thing. I have said things that might help explainthe curious pricing of this product.
My first comment ever on this thing went “It looks awesome. I hope they can get it out the door while retaining some profit for their fairly large team”.
Maybe the reason behind two year late release is that they are waiting for the price of components to reduce. For example the Raspberry Pi Model B was upgraded to 512 MB ram after an year of release due to price cuts. Once the price reduce they start manufacturing the board with these low priced components.
I’ve seen how the sausage is made in marketing land, and this looks like the same dealio. It’s hard to imagine the kind of money that’s in marketing, but folks will pay absurd amounts of cash for attention. It doesn’t matter to the markerters if the marketing sells more products. What matters is that they can show their customer, the person who paid for the marketing, that a certain number of people paid attention. This is why the Super Bowl sells ads which cost eye-popping amounts of money which you could never trace back into actual sales with reliability. If the same number of people who bought a CHIP in the kickstarter had clicked on a Youtube ad, somebody would be rolling in cash. And really, when’s the last time you ever clicked on a youtube ad, or even had them unblocked?
So the unanswered question is, who paid Next Thing to run a marketing campaign for them? :)
So what if the hardware costs $9?
Yes, they said it would run Linux.
But do they have the BIOS/firmware/monitor to make the hardware run Linux?
Or are the people who actually receive the computer going to get something that can’t run anything because the necessary firmware is missing?
Linux works on PCs because PCs already had the BIOS run an OS,
There is the equivalent of a BIOS for ARM chips. Lots of ARM chips run something like that. It’s open source and it works.
Apparently they are demoing the boards, so my guess is that they are well past that problem.
Yea, they got that… and it’s (mostly) free and open-source. Allwinner doesn’t have the best track record for delivering the “open source” promise, but the important parts have all been figured out by the folks at linux-sunxi (https://linux-sunxi.org).
Thanks for the responses!
So a computer it is suposed to have a monitor right? well in that case it cost 25$ not 9$… otherwise, they could call it a server..
Comparing to raspberry, rasp costs 35$ plus 5 or 10 bucks for those who havent a sd card lying around; but it has the monitor port hdmi, it has network (not wifi but cable)..and it can even have better performance than this so is is a basic computer out of the box for 40$ or 45$. The difference? hum.. well performance..
PLus i hate everything sold with marketing techniques, also known as it costs more than they say, or anoucing price of half equipment..
All a computer requires is a CPU, memory registers, and IO (of some sort)
A way to input instructions also.
Agreed. There are many small dedicated system that do not need a screen. Once the code is loaded it will just run happily doing what it was programmed to do.
For example – I can use a lot of component to make an automatic gate opener. All the input will be is a momentary push button.
Code to open the gate, wait 5 minutes, and close it again. Micro switches directly to the motor will handle the limiting.
Yes – I can do that with discrete components like 555 timers OR I could use a little $9 board. It can even log the number of opens/closes and their times because it is ALL software. Download of data be by serial. Same as loading code.
Again – the ‘Internet of Things’ makes it very easy to make a mini webserver with something like this, and so you now have your data available for you to view in a browser, or to lock the gate after hours.
Not every computer needs a screen, keyboard, mouse etc. Just think outside the box :)
So the raspberry pi doesn’t need a monitor added to it’s cost, but the chip does?
Computers didn’t have screen for decades and yet they were computers. I’ve never owned a TV or a monitor in my life and I can happily live without one (look up ‘SSH’).
I agree with you on the marketing techniques. This project seems a bit dodgy to me and I could totally imagine them announcing double the price soon.
Slightly tangential to the topic, Allwinner (the manufacturer of the chip in CHIP) just joined the Linux Foundation: http://liliputing.com/2015/06/allwinner-joins-the-linux-foundation.html
This is a good sign. Allwinner looks great on paper, but getting ramped up with configuring Linux on their SoCs is a confusing mess, w/ all roads leading to sunxi. I’ll leave it at that, since it looks like they’re making efforts to make good. One more tick in the positive for the little CHIP.
I worked for an IC and components broker in New York for three years. What these guys did was get the suppliers to commit to piece prices for 500k quantities, then banked on the Kickstarer money to make up the difference. It’s fucking brilliant.
This competitor of theirs has sand in their vaginas now that they got schooled so badly.
and when the backers receive their CHIP send from CHINA (where it will be made), then the real burn of paying $20 from !US people will be felt :)
And how the “$9” computer-with-no-HDMI will turn to $25+ computer
For a lot of us the lack of HDMI isn’t an issue, because we don’t have HDMI capability where the board is going to be used. The monitor I’m looking at now has HDMI capability, but is isn’t located where any HDMI capable SBC will see regular use The lack of VGA is an issue since many do have serviceable VGA monitors. A snow ball stands a better chance of surviving in hell, than the chances that products as this will be manufactured in the US. depute reading that first sentence several times I don’t get the point being made
I don’t have the same technical knowledge, but I am pretty decent at research. After reading this I did a quick search whois search on the website provided and the person listed on the Kickstarter profile, Daven Rauchwerk. (all information is publicly available via Google)
Previous Kickstarter was due 12/2014 still has fresh comments claiming no delivery with only 414 backers https://www.kickstarter.com/projects/1598272670/meet-otto-the-hackable-gif-camera/comments
There are a series of websites tied to him which have recently been updated to addresses in both TX and CA, his Facebook profile lists him as from LA
According to Bizapedia, he was the registered agent for Three45 LLC back in 2006 – 2007, a LA company
Kickstarter verified Daven Rauchwerk vs. his name on Facebook, Twitter and LinkedIn listed as Dave Rauchwerk
Weird title on the GetChip.com site “getchip.com | Free Car Insurance Quotes | Online Education | Free Credit Score | Online Checking Account”
All these inconsistencies in addition to the information above raise a lot of red flags regarding the veracity of the claims made and the ability to follow through.
If he couldn’t deliver to 414 backers with $72k, I’d be wary of his ability to deliver to 40k backers while managing $2.1mil
NextThingCo.com updated 09/01/14 Obfuscated
S-T-A-K.com updated 09/01/14 1940 Union St. #32 94607 (CA)
ElevenArms.com updated 10/13/14 Private Registrant
NextThing.com updated 12/27/14 5305 Bolm Rd Ste 5 78721 (TX)
NineDollarComputer.com updated 05/05/15 5305 Bolm Rd Ste 5 78721 (TX)
ReallyTinyComputer.com updated 05/05/15 5305 Bolm Rd Ste 5 78721 (TX)
RauchWerk.org updated 05/18/15 Private Registrant
GetChip.com updated 06/02/15 1940 Union St #32, 94607 (CA)
“C.H.I.P., a small single board computer available for $9.” What does AVAILABLE mean? because english is not my first language.
If something is available it means it is obtainable / can be acquired. Saying it is available for $9 means you can buy it.
hi there yeah a $9 computer with 1 ghz cpu 512 mb ram 4 gb flash storage
I’ve got mine! They are real. I actually got 10 of them last week. They’ve shipped the first few thousand already, right on/ahead of schedule. Note: I am affiliated with the company, we are one of the VCs that are backing them.
Sorry, conspiracy theorists and competitors: It is possible. I actually met with the CEO of the manufacturer in China to help the deal get done. But Dave and the incredible NTC team gets all the credit for having the courage and the balls to do this.
More miracles will be emerging shortly.
Olimex doing free advertisement for Next Thing? Whats underneath the table agreement?
Did somebody not affiliated got their ?
Yep I got mine a few month ago. It realy works, I love it :-)
And I ordered 2 more.
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