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[Rant] Pegasos "too cheap" rumours debunkedANN.lu
Posted on 24-Jul-2004 12:37 GMT by Johan Rönnblom68 comments
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For some time now, rumours that the Pegasos is sold at a cheaper price than production cost have been frequent in some circles. Recently, these claims were brought out into the open and could quickly be shown to be based upon incorrect assumptions about the Pegasos hardware. For some time now, rumours that the Pegasos is sold at a cheaper price than production cost have been frequent in some circles. In this thread well known AmigaOS4 contributor Stefan Burström brought the rumour out into the open claiming: "The USERS of a cheap, subsidised mainboard are happy because they have cheap hardware. However, they did not pay the actual cost of the hardware. [...] The Pegasos users may be happy for a short while the Pegasos is cheap, but the truth is that it doesn't finance itself."

He later clarified himself to speak only about the Pegasos 1: "Well, I was refering to Pegasos 1 since that is the only board I have made any homework on, so don't put any words in my mouth I didn't speak.", "I brought it up simply because this 'subsidised' discussion has been here before so I decided to do some homework. On _that_ board. I have no information on the Pegasos II so I decided not to discus it. Simple eh?" and "I insist on it because I am not claiming that the Pegasos 2 is subsidised. Simple eh? This whole subsidised story started with the Pegasos 1 and back then I supported it and did some homework."

Stefan supported his claims by stating that he had experience in the field: "Oh, btw, a part of my professional job is to design cost effective consumer electronics, so I think I have a fair amont of knowledge of the actual costs associated with PCB manufacturing."

He then claimed that based upon his calculations of the Pegasos mainboard PCB cost, the machine must be too expensive to make: "I started out with the PCB to get a starting point of the discussion. [...] I find it hard to believe that a board like this would have a PCB with a cost of 1/3th of the total BOM [Bill Of Materials]."

He explained that his guess was based mainly of his estimate of the PCB cost: "I started building a BOM way back yes. I guess I still have the draft somewhere on my old A4K. I never got that far as checking prices for the more advanced chips though." and "But fwiw, I calculated the PCB cost now just because it was the easiest one to do with most chance of getting accurate prices even 2 years back. For the NB, SB, Ethernet Phy, AC97 etc. it would have been much harder to find the accurate numbers which I started to look up way back."

Stefan's estimate of the mainboard PCB cost: "Right but it is still a ~100 sq inch PCB. 6 or 8 layers I'd guess. Microvias between layer 1-2 and 7-8 to be able to route the BGA's. A small scale production run of such a PCB easily reaches 100 USD per board. And that is before the startup costs for the PCB fab is distributed on the boards." and later clarified that "The expensive part is the micro via layer, not the actual # of the layer it goes through."

The inclusion of a the cost for a micro via layer did not come from knowledge about the Pegasos 1 board, however: "I havn't seen anything but pictures of a Pegasos so I havn't been able to inspect the boards."

Instead, he motivated it by referring to his stated knowledge about PCB design: "Nope, since I know that the Artica is a 492 pin BGA with a ballpitch of around 1.27 mm. Further more, the southbridge is is most likely as similar package as the VT82C686 (I have the datasheet here) which also has ballpitch of 1.27mm. Given a track width of 5 mils and clearance of 5 mils that would make it impossible to route using only through hole vias. Convinced yet?"

However, the fact is that the Pegasos (1 and 2) boards have six layers, that the area is 63 square inches rather than 100, and that they do not have any expensive micro vias.

Thus, it seems that the rumours that the Pegasos 1 (and Pegasos 2, even if Stefan is not among those making that claim) is based on incorrect assumptions about the Pegasos hardware.

Finally, I'd like to give Stefan some credit for having the guts to bring this up in public, rather than keeping it "behind the scenes" where these claims are seldom questioned and are quickly accepted as facts by many people.
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Comment 1Johan Rönnblom24-Jul-2004 10:41 GMT
Comment 2Sammy Nordström24-Jul-2004 10:50 GMT
Comment 3Fabio AlemagnaRegistered user24-Jul-2004 10:56 GMT
Comment 4anonymous24-Jul-2004 11:00 GMT
Comment 5Sammy Nordström24-Jul-2004 11:11 GMT
Comment 6Fabio AlemagnaRegistered user24-Jul-2004 11:18 GMT
Comment 7Anonymous24-Jul-2004 11:23 GMT
Comment 8Sammy Nordström24-Jul-2004 11:35 GMT
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Comment 22Thomas FriedenRegistered user24-Jul-2004 15:48 GMT
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Comment 28Amon_ReRegistered user24-Jul-2004 17:37 GMT
Comment 29Amon_ReRegistered user24-Jul-2004 17:38 GMT
Comment 30Amon_ReRegistered user24-Jul-2004 17:39 GMT
Comment 31Amon_ReRegistered user24-Jul-2004 17:41 GMT
Comment 32Anonymous24-Jul-2004 17:48 GMT
Comment 33XraalE24-Jul-2004 17:52 GMT
Comment 34reflect24-Jul-2004 18:01 GMT
Comment 35corpse24-Jul-2004 18:35 GMT
Comment 36Amon_ReRegistered user24-Jul-2004 18:55 GMT
Comment 37XraalE24-Jul-2004 19:40 GMT
Comment 38AdmV0rl0n24-Jul-2004 21:54 GMT
Comment 39minator24-Jul-2004 22:00 GMT
Pegasos "too cheap" rumours debunked : Comment 40 of 68ANN.lu
Posted by AdmV0rl0n on 24-Jul-2004 22:38 GMT
In reply to Comment 39 (minator):
Mr Burström stated the Pagasos was "subsidised", impling it is sold below cost.
Well, The PRE-Production versions HAD to be subsidised, there was clearly no money going to be made on those. Seeing as you and he are in some agreement, May I presume that this 'pre-production' occurred under 'Thendic-France'.


I stated that was (to my knowledge) never the case, I used to work for Thendic-France and I heard the prices, the Pegasos is a lot cheaper to produce that you may think so yes, it makes a profit and always has done.

Are you including all the production variants that had problems, customers whom needed help, and additional costs. Thendic/Genesi/Whatever name you are arguing as a basis clearly had to take these on the chin, therefore, one could say these were also subsidised, no? Would that be unfair?

Mr Burström's estimation of price is based on list prices of components and a wrong estimate of thesize and number of layers for the main PCB (the correct figure is not mentioned in the thread at all).

I can't comment. I would say there are people on both sides who have ideas about what it costs, and either could be right/wrong.
Nobody is taking account of deals bPlan may have done with suppliers or the numbers produced, the numbers produced is the single most important factor as it pretty much determines the manufacturing price.

Nor does it seem YOU are taking into account the fact that these are low in number, and buying hardware/cpu/memory/chipset from vendors in low numbers does'nt equate well with you statement. Now I COULD be wrong, and vendors may have stumped up special pricing, if so, the onus lies on those who claim its cheap to stump up the evidence.


>Everyone knows that smaller designs are more expensive than bigger ones, hence the price
>difference between a mobile computer and a desktop.

No, thats because they use more expensive components, the cost of a smaller board is lower.


I'm sorry, I have to argue here, many laptops use specifically lower cost components, bar the TFT, Battery, normal mobile extra's, and I really do question your statement on these grounds. I don't think the board is the cause of the cost difference to the degree you just claimed.
Someone quotes BBRV:
>We make five new boards with April 2. Making five April 2 PCBs cost $1800." statement*,
>a single Pegasos I board costs 300USD.

OK, does that include all components, design time, wages. I'd also like to point out to you that your statement smells iffy. For the design changes, devlopment, testing, we KNOW it was'nt hours, it was months, therefore, unless BBRV pays his staff with fresh air, I question this statement as well. If you want to talk about 5 X April 2 boards, I want you to include the devlopment, design and testing in the damn costs. Once you do that, we'll come back to subsidised..

Producing prototypes in single number quantities is incredible expensive, yes, but they were just prototypes, that was not a production run.

Agreed: But, as you have stated, You indicate that this was done under Thendic-France. So I now have a question for you. How did the design get to be taken away and used by a 'seperate company'? Am I missing something here? If the design was done under Thedic-France, then the Auditors of the bankruptcy should have frozen and gained control of such assets, ESPECIALLY after your ex-collegue here has made such pained efforts to claim there was not/is not a link between the two companies.


If the Pegasos was subsidised it wouldn't be selling at $500, it'd be selling a hell of a lot cheaper - like $50 PC boards.

From your explanantion so far, I would say you have made an excellent case for thinking that Thedic-France, Its creditors, The Tax Payers in France, have all subsidised the design and building of a product someone else (if you bother listening to Johan's bullshit) is miraculously now building, selling, and perhaps even making money on. And yes, You probably could say it is NOW not under subsidy, after all, those nice socialist French look to have absorbed all that rather nicely (if what you indicate is anything to go by..)
The pegasos makes money but no it probably doesn't pay for the MorphOS development (yet) or the marketing done by Thendic-France, but thats irrelevant as Thendic-France went bankrupt last Janurary, you can believe me when I say thats something I know *all* about.

OK, if you know all about that, what does Genesi owe Thedic-France and its creditors for the design, sales and marketing, development and initial work on the product. You see, Johan as far as I am concerned has made a wild effort to cover his story, but I'm not buying. I don't buy his statement that he has no connection with Genesi, I don't buy his statement that he refuses to accept Genesi was formed by management, and that bPlan and Thendic-France according to official documents and press releases were going to merge(pre air france disasters), and anyone from Thedic-France who starts to claim such dubious bullshit deserves all the heat that comes there way. The side story about how the companies were firewalled of by accountants and auditors is'nt going to make me go away, that is just someone trying their get out of jail free card.

Now wether Stefan is right or wrong about the actaul nitty gritty of the hardware build of material costs, I confess I do not know, But I'de still say that Thendic-France staff or EX staff have amazing balls to come here claiming that they were part of the development, then on the other hand claim there is no possible links between Thendic-France and Genesi. Sheer ****** bull. If Thendic are bust now, and they and not Genesi paid for and did the sales and marketing, then Genesi are today building every single board under a subsidy, legal or not, sematics or not, fact, or fiction.


Now if you think I'm wrong, try posting some FACTS, not guesses based on numbers you've pulled out of your backside.

I like nothing BETTER than tangling with Genesi, and (I shall tread carefully for now), Thendic-France/Genesi Staff, or EX-either-entity(I regard them as being one and the same, the difference is an administration issue) and talking about *facts*.

Shall we ?
#42 Johan Rönnblom #52 Amiga Chief #53 minator
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List of all comments to this article (continued)
Comment 41AdmV0rl0n24-Jul-2004 22:58 GMT
Comment 42Johan Rönnblom25-Jul-2004 10:04 GMT
Comment 43Rob25-Jul-2004 11:19 GMT
Comment 44AdmV0rl0n25-Jul-2004 11:30 GMT
Comment 45Johan Rönnblom25-Jul-2004 11:39 GMT
Comment 46AdmV0rl0n25-Jul-2004 11:51 GMT
Comment 47Johan Rönnblom25-Jul-2004 12:25 GMT
Comment 48AdmV0rl0n25-Jul-2004 12:40 GMT
Comment 49Johan Rönnblom25-Jul-2004 14:20 GMT
Comment 50AdmV0rl0n25-Jul-2004 14:49 GMT
Comment 51Johan Rönnblom25-Jul-2004 15:56 GMT
Comment 52Amiga Chief25-Jul-2004 19:20 GMT
Comment 53minator25-Jul-2004 20:17 GMT
Comment 54Johan Rönnblom25-Jul-2004 20:21 GMT
Comment 55Anonymous25-Jul-2004 21:08 GMT
Comment 56hammer26-Jul-2004 01:37 GMT
Comment 57Sammy Nordström26-Jul-2004 06:32 GMT
Comment 58hammer26-Jul-2004 07:07 GMT
Comment 59hammer26-Jul-2004 07:40 GMT
Comment 60AdmV26-Jul-2004 08:59 GMT
Comment 61Johan Rönnblom26-Jul-2004 09:09 GMT
Comment 62Sammy Nordström26-Jul-2004 09:22 GMT
Comment 63Sammy Nordström26-Jul-2004 09:50 GMT
Comment 64minator26-Jul-2004 10:39 GMT
Comment 65Sammy Nordström26-Jul-2004 10:46 GMT
Comment 66Anonymous26-Jul-2004 12:05 GMT
Comment 67Bill Evans26-Jul-2004 13:18 GMT
Comment 68minator26-Jul-2004 13:18 GMT
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