|[Rant] Pegasos "too cheap" rumours debunked||ANN.lu|
|Posted on 24-Jul-2004 12:37 GMT by Johan Rönnblom||68 comments|
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
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
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
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.
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
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|Pegasos "too cheap" rumours debunked : Comment 53 of 68||ANN.lu|
|Posted by minator on 25-Jul-2004 20:17 GMT|
|In reply to Comment 40 (AdmV0rl0n):|
>Well, The PRE-Production versions HAD to be subsidised, there was clearly no money
>going to be made on those.
Pre-poduction and prototypes yes, they would have needed some prior investment.
>Seeing as you and he are in some agreement,
>May I presume that this 'pre-production' occurred under 'Thendic-France'.
Development and production are done by bPlan, Thendic sold them. I don't know how the Pegasos development was funded, however I think you'll find the original investment came from BBRV (via series of companies but thats a guess).
>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?
Although there were 3 versions with the Articia and they were made in small batches I believe the componets for all those batches were bought at the same time so that saved a lot of money per unit.
For the boards which needed to be swapped out (primarily non-April) yes, I expect they may have made a loss. Not sure of the April 1 as I don't there were that many of them and even when offered a free exchange some users didn't bother as they were happy enough with them already.
>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.
I think the people who actually design and build the boards would be best placed to know, I spoke to them...
>>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.
Depends how low, I expect the pegasos has always been produced in bigger numbers than people suspect. We're not talking 1,000's but were also not talking 10's. If it was produced in 10's the price would rise quite considerably.
>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.
My point is that any 3rd party estimate made is not going to be totally accurate because there are factors which cannot be known including if there any special deals. I have no idea if there are any deals myself.
>>>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.
Check the prices of mobile CPUs and mobile hard discs, they are more expensive than standard desktop parts.
However this poster was climing that as a board gets smaller it gets more expensive, that may well be true if you need to make a *very* small board and you need extra layers but until then the cost will drop.
>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..
I have never argued that the price of the Pegasos covered development expenses or indeed other expenses, I stated that to my knowledge it is not sold below (production) cost.
Once the company makes enough to pay back debts and the investment capital then the boards have also covered those costs.
These are completely different questions:
>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.
Like most internationl companies they are separate companies, most companies look like a single entity but in reality are made up of legally independant companies each with different responsibilities, they may act in unison but that does not mean they are one company. bPlan and Thendic-France were meant to join but that never happened, If Johan only had a contract with Thendic-France then he is *not* legally connected to Genesi (I believe this is what he's referring to).
> 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.
Since Thendic went down the vast majority of sales have been to Freescale and as far as I'm aware Thendic had nothing to do with the marketing there.
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