NRE Costs are what you get charged to have your customized electronic product ready for mass manufacturing.
Many people don’t know that the amount of NRE charged to you can be very different from the actual NRE costs to design the product.
Many design firms only tell you about the cost of design and prototyping, conveniently forgetting that getting a working prototype is only 1/4 of the journey.
The total development cost to get an electronic product designed, engineered, prototyped, injection-molded, tested, and CE/FCC certified, ranges from around US$ 50,000 to millions.
There is a whole list of NRE costs you may be charged, we’ll take you through all of them so you know what you can expect, and give you NRE Cost Ranges to assess whether what a factory charges is fair.
NRE Costs depend on:
- the complexity of the product
- how “new-to-the-world” it is
- where and by whom the design is done
- where the product will be used (medical, mining & automotive products are a lot more expensive to develop due to testing & certifications)
NRE Charge depends on:
How much YOU actually pay can be very different from what the costs are.
- How different do you want your product to be
- Do you want to own the IP (Intellectual Property) ?
- Who are you
In Taiwan & China, there are many ODM (Original Design Manufacturing) factories which will gladly put your logo on their electronic product, and will only charge you a sample fee and say $500 to set up printing.
After you approve that golden sample, you just wire them the 50% deposit, and mass production starts. Time To Market doesn’t get faster than that.
ODM means you’re up and running very quickly, and is especially useful for complex products such as laptops, phones, and cameras.
Developing these kinds of products from scratch would take you many iterations over many years to get everything right.
And then you will have only caught up with the status quo, while the market has already advanced a lot.
The main disadvantages of ODM are:
- you have no ownership,
- change too much, and you will wait forever.