This is another question we get rather frequently. The short answer? It depends.
Some clients require the full range of our services, while others may have already had some of these done in their own country, like for instance the industrial design work. Regardless of what stage you’re project is at, one thing is certain: you can expect significant savings having your device not only manufactured in China or Taiwan, but also developed here.
Costs will of course heavily depend on the complexity and size of the product. Some products may incur $120,000 of Non-Recurring Expenses (NRE), which includes engineering, mold making (for the housing of the device), prototyping, and certifications. More complex products with a lot of programming can run in excess of $500,000. And, if you haven’t already heard, volume is king in China, and few factories in China are willing to take orders below 5,000 pieces. At Titoma we realize that especially on shorter run products the NRE investment weighs heaviest, so we also help our clients do lower quantity projects, as long as the first order is worth at least US$150,000.
But, despite the savings of having development and manufacturing done in Asia, the capital needed to develop a new product can still be significant considering it may involve most or all the following:
- Industrial Design
- Mechanical Engineering
- Electronics Engineering
- Firmware Programming
- Software Programming
- Tooling/Mold Making
And of course aside from development and manufacturing costs you also must take in consideration the cost of shipping the goods (generally about 5% of value), VAT tax in your home country, trade shows and marketing, etc. With all these costs, it’s a wonder why anyone would want to develop their own product!
But they do. (Another articles you may also enjoy reading:
The Silver Lining
We’ve been in this business long enough to know that the success of a product doesn’t depend fully on a single good idea. Product development is about fitting all the pieces of a puzzle in just right way. If one piece doesn’t quite fit, the whole project fails. But once everything fits into place–and at just the right time, mind you, especially since the market window in electronics can close quickly–then the rewards are frequently considerable.
Please contact a Titoma representative for more information, a quote, or other inquiries.