Re: BBC Commissions Promise TV to Build Ultra-High-Capacity DVR

Roland Perry wrote:
> In message <QF6Ne.3888$Ht5.3273@xxxxxxxxxxxxxxxxxxxx>, at 21:00:32 on
> Thu, 18 Aug 2005, DAB sounds worse than FM <dab.is@xxxxxxxxxxx>
> remarked:
>
>>>>> Except that the £40 is 2.5x (or whatever) the bill of materials
>>>>> for the disk drive. Don't make the mistake of counting it twice!
>>>>
>>>> I didn't. All I did was 8 x £40 = £320. Then multiply by 2.5 giving
>>>> £800.
>>>
>>> Yes you did. What you want is 8x (£40/2.5) then multiply by 2.5
>>
>> No, that's assuming that you can buy the hard drives at exactly the
>> cost of the bill of materials, so that the hard drive manufacturer
>> doesn't make a single penny profit. In fact he'd make a loss,
>> because he's paying for labour and fixed costs, but selling the hard
>> drives at the cost of the bill of materials.
>>
>> I grant you that if they bought the hard drives in bulk then they'd
>> get them for less than we pay for them in shops, but you can't
>> divide by 2.5. Computer shops don't make much mark-up on stuff like
>> hard drives
>> you know, so even buying in bulk wouldn't save much compared to what
>> we get them for.
>
> You are correct in that the hard drive manufacturer will make be
> covering his labour/operating costs and a small profit when selling in
> bulk to a mass market manufacturer of the [pvr] equipment, on top of
> his bill of materials. What's also true is that this won't be a
> "standard" markup of 2.5x, or anything like that high.


But as I said, computer shops don't make much profit on each component
they sell, so although I agree that if they buy hard drives in bulk then
they'll get a discount, the 2.5x won't be reduced by as much as you
might think.


>>>> But hard drives aren't the only components in this thing that'll
>>>> require 6 tuners, 6 DVB-T receiver ICs etc etc etc.
>>>
>>> Yes, and a proper manufacturer will be buying all those in at 1/2.5
>>> of the price you you've seen for buying them as individual items.
>>
>> No, because consumers never buy DVB-T ICs or RF tuners. The 2.5x
>> figure was 2.5 times the bill of materials, i.e. the cost of the
>> components only. Then you add things like the Chinese company that
>> makes the products' profit, then the shipping cost from China to the
>> UK. Then the UK developer of the product gets his cut, then the shop
>> gets their cut. You're missing out a lot of people in the chain here.
>
> Well, if your hypothetical PVR manufacturer is designing and making
> the units in the UK, with parts bought from Maplin, then of course
> the costs will be ludicrous. Thankfully, most will be making them in
> China next door to the hard drive and chip factories, and none of the
> distribution chain markups you mention will apply (except on the
> finished product).


All the following have to be paid:

hard drive manufacturer needs to make a profit
manufacturer/assembler of the device needs to make a profit
shipping and duty for getting the products back to the UK
importer margin
retailer profit

The 2.5x figure was quoted in an article I read where they used that
figure as a rule of thumb for consumer electronics products. That 2.5x
applies to bill of materials. So, after you've paid for 8 hard drives, 6
RF tuners, 6 DVB-T receiver ICs, a general purpose CPU, RAM, PCB,
connectors, the case, power supply etc etc etc, then you multiply that
total by 2.5.


--
Steve - www.digitalradiotech.co.uk - Digital Radio News & Info

Find the cheapest Freeview, DAB & MP3 Player Prices:
http://www.digitalradiotech.co.uk/freeview_receivers.htm
http://www.digitalradiotech.co.uk/dab_digital_radios.htm
http://www.digitalradiotech.co.uk/mp3_players_1GB-5GB.htm
http://www.digitalradiotech.co.uk/mp3_players_large_capacity.htm


.

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