Butterfly production cost?

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RayKAvr
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Posted by RayKAvr: Mon. Mar 13, 2006 - 11:08 PM
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Question for those experienced in moderate volume fine pitch mixed surface mount production:

Aside from the cost of the parts on the BOM, if produced in volumes of 1000 units at a time, what would you estimate for the domestic (USA or Canada) production cost to be for:

1) the pcb
2) the lcd
3) assembly labor

Yes, I got a bunch of quotes and didn't like them. Certainly doesn't get me anywhere near something that could be sold even at cost for the $20 range. Granted Atmel isn't counting the cost of the Atmega169, but their production can't be in much larger batches because we don't see DigiKey go from out of stock to 10K quantities overnight, more like a few hundred at a time.

My previous products weren't consumer oriented so I don't have any experience with this kind of production, but I could apply lessons from the Butterfly to my current project.

Do others agree with my guess that Atmel got surplus LCDs for this project and that the cost to make them from scratch would have been higher? The new LCD for the latest STK has the AVR initials so that one can't be surplus, but that one isn't available on a $20 product either.

Now, about the choice of packaging. I saw that consumer products using the Atmega169 have the bigger package, which according to the definitions used by my PCB vendor would no longer call the resulting design "fine pitch" and hence less expensive.

Wonder why Atmel chose the smaller package, maybe their PCB fab doesn't care or they wanted to showcase a business card sized design regardless of slightly higher cost ?

Final question for those experienced... does it make sense to send a proprietary design offshore for cost savings, or is it too risky that they would simply make more and sell them on their own?

I guess the lockbits come in handy if you send them just test firmware for manufacturing and do your own final programming using a trusted facility, but that's another step.

Tags:

AVR Microcontrollers, megaAVR and tinyAVR, ATmega16, ATmega169
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smileymicros
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Posted by smileymicros: Mon. Mar 13, 2006 - 11:30 PM
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I've always speculated that the Butterfly costs a lot more than Atmel makes on it. Remember they don't even get $20 for it since Digi-Key has a substantial markup. I think they have done it because it has drawn so much interest and postive feedback. They give them away at seminars and industry meetings. Folks are delighted to play with the Butterfly and it helps move them to the Atmel product line. These guys are smart and they know marketing, how else could they enter a mature and stagnat field and capture so much of the market so quickly, there products are better, but their marketing is also better.

To your second question. IMHO if it can be stolen it will be stolen - if they can make a few yuans off it. But, if you have it manufactured in your hometown and sell it, then it can also be stolen. It is easy to reverse engineer a design. One guy here at AVRFreaks can remove the packaging from an AVR down to the silicon and read the program. You have to be the judge as to how much your product is really worth and take the appropriate measures to protect it if it is in fact a new IPOD or something, but if it is like most products, I wouldn't worry to much about it being stolen. Frankly, I have yet to see a product that if I wanted to duplicate it, I could do my own design quicker than I could reverse engineer it, so the real threat is not that your product will get stolen, but that you will prove a market exists and a competitor will come out with something better.

Smiley

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RayKAvr
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Posted by RayKAvr: Mon. Mar 13, 2006 - 11:49 PM
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Thanks, I'm not concerned about determined reverse engineer hackers. I'm aware of e-beam readout of stored programs and various other ways to defeat the intent of lockbits. As you said, anyone who can go through that level of effort can design from scratch.

What I am concerned about is the zero effort "let's just make more than he asked" kind of theft.

That aside, I am curious about educated guesses of dollar figures of production costs from people who have manufactured similar products in North America.

I am also curious about the choice of packaging for the chip.

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RetroDan
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Posted by RetroDan: Mon. Mar 13, 2006 - 11:49 PM
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I've got a small stick on digital clock that is about the same size as the Butterfly with a very similar LCD screen and peizo element all on a small PCB and I paid a dollar (Canadian) for it.

So in volume they certainly can't cost very much to produce.

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mikehg1
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Posted by mikehg1: Mon. Mar 13, 2006 - 11:53 PM
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I think the Butterfly is no more than a marketing tool (Advertising). Then if you think about how much some of the big companys sink in adverts (airtime during the superbowl comes to mind) That would pay for a lot of butterflys! :)

Mike H.

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Bronze Marktheusch
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Posted by theusch: Mon. Mar 13, 2006 - 11:58 PM
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Quote:

Do others agree with my guess that Atmel got surplus LCDs for this project and that the cost to make them from scratch would have been higher?

I wouldn't agree with that. It may have been a stock product already, but very likely it is a semi-custom--existing model for overall size and pinout; mostly stock segment layout; perhaps a few segments culled from the "clip-art" library. Break-even for semi-custom is often in the hundreds; I suspect Atmel purchased in the thousands for the Butterfly.

A Mega169 ain't the cheapest AVR for mere mortals--about US$5 in qty 100. Add a couple bucks for the LCD, a buck or two for Dataflash. PCB next to nothing in quantity. I'd have to take a closer look at the BOM, but I'd figger right around that $20 mark to make 1000 in the US.

And dont forget the clip-on pin! ;)

Lee

You can put lipstick on a pig, but it is still a pig.

I've never met a pig I didn't like, as long as you have some salt and pepper.

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RetroDan
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Posted by RetroDan: Tue. Mar 14, 2006 - 12:01 AM
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I agree 100%

I think they should just give them away when you purchase some of there other excellent products, like the STK500.

The ButterFlies are excellent little demo units, I don't see much point in selling them one at a time. Perhaps, they should sell them in bundles at a cheaper rate per unit. I check DigitKey and they don't even offer a volume discount for them.

Just a thought.

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RayKAvr
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Posted by RayKAvr: Tue. Mar 14, 2006 - 12:07 AM
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Thanks, I understand that Atmel even gives it away free at times.

So please forget that I mentioned $20 or Atmel's cost.

If you have experience in manufacturing similar products, I'd be interested in your perspective on the original questions posted above.

And yes, I understand that cheap stuff can be bought at flea markets, but doesn't seem relevant to the task of getting an AVR based product out the door.

I do have an additional question, though. Packaging aside, Atmega 169 and 329 seem to have very similar cost. Other than compatibility with Jtag Ice Mk I, would there be any reason not to just base any new design on the 329 instead of 169 ?

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RayKAvr
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Posted by RayKAvr: Tue. Mar 14, 2006 - 12:15 AM
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theusch, appreciate your estimates. You're not including assembly cost for this double sided, fine pitch, mixed through hole and surface mount design. Is that because you see the assembly labor to be relatively small in 1000 qty, or you forgot ?

Just to calibrate my expectations, l used the Butterfly design to get quotes from various vendors and assembly labor was way higher than I expected.Of course at this stage of design I can try to mount my LCD without pins, I can try to eliminate all my through hole components, switch to the larger 169 or 329 package, or maybe I'm just looking at the wrong vendors and that's why I'm asking the questions here.

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zoomcityzoom
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Posted by zoomcityzoom: Tue. Mar 14, 2006 - 12:35 AM
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Aside from the differences outlined in AVR098 app note, I see that the ATmega329 is about $2 more than the ATmega169 in smaller volumes. If you can manage in half the memory size all the way around, even $1 a unit savings is substantial.

The assembly house that I use does not charge extra for assembly with the MLF/QFN package instead of the TQFP.

If you can find an assembly company that does turn-key work, you can usually save on parts cost by letting them do the purchasing. They are able to purchase larger quantities for all of their customers combined.

As for off-shore PCB manufacturing and board assembly, the folks at www.e-teknet.com do a nice job. You have to supply the parts though.

I sticking with made in USA for the assembly of my current product. I'm getting great assembly pricing and it's a local company.

-Tom

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RayKAvr
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Posted by RayKAvr: Tue. Mar 14, 2006 - 12:51 AM
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Thanks for the info.

I always use the checkbox for "in stock" items when I look for Digi-Key's pricing, and from the choices that were available the 329 was actually LESS expensive than 169. I sort of assumed that the non-stocked parts are not current production, but I guess I have check on a case by case basis against what Atmel claims to be current.

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zoomcityzoom
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Posted by zoomcityzoom: Tue. Mar 14, 2006 - 12:57 AM
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Thanks, also to you. I never noticed the "in stock" check box before. Very helpful.

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Bronze Marktheusch
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Posted by theusch: Tue. Mar 14, 2006 - 01:24 AM
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Quote:

I see that the ATmega329 is about $2 more than the ATmega169 in smaller volumes.

??? Actually, this is an anomaly in the pricing structure right now.

Quote:
ATMEGA329-16AI
1 -- 7.61
25 -- 4.78
100 -- 4.43

Quote:
ATMEGA169-16AI
1 -- 8.60
25 -- 5.40
100 -- 5.00

Lee

You can put lipstick on a pig, but it is still a pig.

I've never met a pig I didn't like, as long as you have some salt and pepper.

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squiggy
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Posted by squiggy: Tue. Mar 14, 2006 - 01:53 AM
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Quote:
Quote:

I see that the ATmega329 is about $2 more than the ATmega169 in smaller volumes.

??? Actually, this is an anomaly in the pricing structure right now.

Quote:
ATMEGA329-16AI
1 -- 7.61
25 -- 4.78
100 -- 4.43

Quote:
ATMEGA169-16AI
1 -- 8.60
25 -- 5.40
100 -- 5.00

I am not disputing the pricing posted,
but I would suggest confirming the pricing structure of the chips under discussion prior to committing to a design.

Somewhere in the distributor’s website’s small print there is probably a notice that the distributor is not responsible for typographical errors.

Ps Lee, nice teeth.

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LCD*AVR4me
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Posted by LCD*AVR4me: Tue. Mar 14, 2006 - 02:21 AM
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Quote:
Do others agree with my guess that Atmel got surplus LCDs for this project and that the cost to make them from scratch would have been higher? The new LCD for the latest STK has the AVR initials so that one can't be surplus, but that one isn't available on a $20 product either.

Unless somthing has changed the STK502 still uses the same LCD as the Butterfly. Now the STK504 has an LCD that has the AVR logo but this is a 160 segment LCD.
Quote:
Quote:


My AVR Site

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Gold Markclawson
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Posted by clawson: Tue. Mar 14, 2006 - 11:52 AM
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RayKAvr wrote:
1) the pcb
2) the lcd
3) assembly labor

We do all our manufacturing in the PRC coordinated out of our office in Hong Kong. For PCBs you pay by the layers and square-inch which is maybe why the size of the Butterfly is effectively dictated by the LCD and the port headers around it and the choice of the 64M1 package to keep things as small as possible. Certainly less than $1 for the board. I'd guess at something like 50c..$1 for the LCD perhaps. The total BOM cost is maybe something like $8-$10 (though that's a high estimate). In the Far East you would expect to pay about 10% of the BOM for LOP (Labour, Overhead and Profit). So maybe add a $1 for LOP making the FOB (Full On Board) cost about $11. The shipping and duty/import tax may account for another 5-10%. So add another $1. That get's it landed into the US for $12. So the $20 retail at Digikey may actually include a fairly healthy margin for them (let's face it, they ARE a business not philanthropists!). But I doubt that Atmel make anything on the the thing as they probably just write it down as a marketing expense.

Cliff

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RayKAvr
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Posted by RayKAvr: Tue. Mar 14, 2006 - 04:01 PM
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cool, thanks, are the prices you mentioned for quantities around 1000 or much higher ?

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Gold Markclawson
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Posted by clawson: Tue. Mar 14, 2006 - 04:13 PM
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RayKAvr wrote:
cool, thanks, are the prices you mentioned for quantities around 1000 or much higher ?

We (amstrad.com - a consumer electronics company) usually work on a minimum production run of 25,000 or more units of whatever it is we're making (it's not economic of us to bother making less than 25K of a particular design). But I'd say my costing (especially the fairly high $8-$10 BOM cost) would be good down to as low as 10,000 units. BTW, normally, in a production design you'd also have additional costs for plastics tooling and per unit costs but I guess the case-less Butterfly manages to avoid this. One of the reasons for >25K production is so that the amortised cost of the plastics tooling isn't too high.

I rather imagine that 10,000 could easily be the number of Butterfly's Atmel has made (in fact quite possibly more than that)

Cliff

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RayKAvr
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Posted by RayKAvr: Wed. Mar 15, 2006 - 01:55 AM
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Cliff, thanks again for your detailed response, it helps me understand the economics and design tradeoffs.

Yes, before watching Digi-Key's stock I also assumed the Butterfly was a high volume item, but noticing DigiKey being out of stock one day and having a couple hundred the next day makes me think their batches must be way smaller than that.

Plastics tooling (and those rubbery buttons with conductive back) is my next great challenge. I have no clue where to start. All my previous projects were built in batches of 500 or 1000 using Sepac, Hammond, and PacTec semi-custom enclosures. Great when the box is similar to what you want, a giant headache if the number of modifications grows.

Have received useful quotes for LCDs today, for the benefit of others who are contemplating smaller production runs the costs are in the neighborhood of $5 for 100 qty, $4 for 500, and $3 for 1000, with several thousand dollars one-time engineering charges depending on backlight and other details. LCD modules with built-in controllers are more, of course, but they are useless for low power applications as the controller draws 1 to 4 mA.

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barnacle
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Posted by barnacle: Wed. Mar 15, 2006 - 05:14 PM
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I'm also on the lookout for those little conductive plastic keypads... if anyone can point me at a source of a cut-to-size rubber matrix that I can stick a circuit board behind, or alternatively a similar click-pop metal contact surface switch, I'd be grateful.

I also want a sideways 'thumbwheel' mechanical rotary encoder I can stick out of the side of a box, mounted on the circuit board, with a press to make function. There's one on my Sony Clie PDA and I haven't a clue where to find one, even Alps didn't have one.

Neil

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www.nailed-barnacle.co.uk

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Posted by dksmall: Wed. Mar 15, 2006 - 07:39 PM
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barnacle wrote:
I'm also on the lookout for those little conductive plastic keypads... if anyone can point me at a source of a cut-to-size rubber matrix that I can stick a circuit board behind, or alternatively a similar click-pop metal contact surface switch, I'd be grateful.

I also want a sideways 'thumbwheel' mechanical rotary encoder I can stick out of the side of a box, mounted on the circuit board, with a press to make function. There's one on my Sony Clie PDA and I haven't a clue where to find one, even Alps didn't have one.

Neil

You can get snab domes at Digikey, something like 401-1403-ND. an example of a scan switch is 401-1264-1-ND.

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Posted by w0067814: Wed. Mar 15, 2006 - 08:06 PM
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We use Custom Keypads here in the UK at work for small production runs (sub 100pcs). We make mock ups of mobile phones and these keypads have proved to be very professional and reliable. They are pretty cheap with the average keypad (which usualy has around 20 keys and cut outs for LCDs) weighing in at about £8.

Tim

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barnacle
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Posted by barnacle: Wed. Mar 15, 2006 - 08:12 PM
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Thanks, DK... I hadn't realised that digikey had a uk outlet now. The scan switch isn't quite what I'm seeking, though - I need something more along the line of the scroll wheel on a mouse. I'll rummage the catalogue further.

Neil

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www.nailed-barnacle.co.uk

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smee
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Posted by smee: Wed. Mar 15, 2006 - 08:34 PM
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barnacle wrote:
Thanks, DK... I hadn't realised that digikey had a uk outlet now. The scan switch isn't quite what I'm seeking, though - I need something more along the line of the scroll wheel on a mouse. I'll rummage the catalogue further.

Something like this part from digikey?
P13381SCT-ND

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