They're claiming better specs than the RPi Model A (512 MB RAM, 1 GHz CPU) with more features (Bluetooth, Wi-Fi on board) for $9 vs the RPi's $25.
I highly doubt they will be able to produce the CHIP for $9/unit.
I highly doubt they will be able to produce the CHIP for $9/unit.
Also, on the flip side of cost comparison, low-quality Allwinner-based tablets are easily available at under $30 on AliExpress.
Even assuming 20K volumes:
Current market price for 4GB of flash is about $2.50[1]; 512MB of RAM is about $2[1]. Processor -- even if something like A33 -- would be about $4. You have another $2 of regulator, connectors, etc. The PCB is about $1.75 in volume and assembly would be $1. That's $13.25.
Even if somehow they manage to make this thing really really cheap and get below that price, let's assume $7 or 50% of magical discount on top of current volume pricing, that's not much margin. Even if you sell 100K of these a year (which is very high) you've made only 200K in profit!
EDIT: I forgot about BLE+WiFI -- add $4!
Some are saying PCB pricing is high: I'm basing that on 2.3"x3.3" 6 layer board with 8 mils holes, and 4 mil clearance and ENIG finish.
[1] I'm basing this on recent 50K purchases but here is a more public source: http://www.dramexchange.com/
Source : A rough quote from http://www.sz-jlc.com/ came out to $0.15 for less than 10k boards
Looking at the picture of their board the package is most likely 0.65 or -- possibly 0.4 -- pitch which means much laser drilled holes.
I think your PCB and assembly costs are a bit high, as well.
I agree that their margins can't be good.
PCB might sound high, but it isn't standard 8/8/10 spec PCB. It will have smaller holes and tighter tolerances.
Remember that they're not going to be shipping for a year. I'm guessing prices will come down over that time.
How an industry giant and a tiny startup came to partner on a sub-$10 computing device owes to Next Thing’s history developing products and business connections with Shenzhen-based accelerator HAXLR8R, says Dave Rauchwerk, one of Next Thing’s three founders. “Once they understood what we were trying to do, they supported us fully.”
Connecting with the right company wasn’t the only break the Oakland-based team had going for them. At the same time they were meeting with Allwinner and explaining their aspirations for a dirt-cheap computer, Allwinner was looking to redesign their successful A13 processor in a new, smaller form factor as a cheaper system-on-chip. It is this new chip, called the R8, that Next Thing received early access to and used in its board design.
I will say that the design is much smaller and minimal so maybe all the fancy addon removal will help cost. But then you have to pay for boards and stuff anyway.
I was pleasantly surprised by the materialization of the RasPi despite their troubles getting production started.
That said, I think this is a pipe dream. Its SO easy to hack together a prototype and then look at the volume discounted total of the BOM and think you've got a product. The most common mistake is to give yourself a "generous" 20% profit over the estimated cost of materials when really it should be more like 300% just to be viable.
I suspect they'll discover soon enough that $20-$30 is a minimum realistic retail sale price for this item.
Reading Bunnie's blog about the ecosystem in China though I doubt AllWinner cares. They are certainly in the "Why ask permission? Is weird! Hey look how cheap this is?" camp.
Also, it's look like allwinner's version of broadcom's rpi, so they mught get the various chips dirty cheap.
http://www.ebay.com/itm/Mini-USB-Bluetooth-Wireless-Adapter-...