How Much Will It Cost to Develop a New Product in Asia? Published by Titoma Design
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.
Consider the graph below comparing design, development, and manufacturing costs in the US and Taiwan for a typical custom embedded device featuring an LCD screen. From this example, you can see that savings of over 50% are achievable. These costs already include the management of Titoma, to make sure that the various component suppliers, mold makers, hard and software engineers communicate with each other effectively, and above all: deliver according to your expectations.
How Much Will It Cost to Develop a New Product in Asia? 70000 60000 50000 40000 30000 20000 10000 0
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Costs will of course heavily depend on the complexity and size of the product. For a simple small gadget, Titoma's budgets to do everything needed start at $65,000 of Non-Recurring Expenses (NRE), which includes engineering, mold making (for the housing of the device), prototyping, and certifications. Larger products with a lot of programming run in excess of $100,000. 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$50,000.
How Much Will It Cost to Develop a New Product in Asia? 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 Prototyping Certifications Tooling/Mold Making Manufacturing Packaging
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.
How Much Will It Cost to Develop a New Product in Asia? 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: 1. 10 Ways to Lower the Cost of Your Electronic Product 2. Kickstarting electronic products: How Crowdfunding Works) 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.
About Titoma Titoma Design has been designing and manufacturing quality electronic products in China and Taiwan since 1999. We work only with reputable manufacturers we’ve trained for numerous years and who share our vision: To produce products at the quality, and cost required to make them a worldwide sales success. Contact us today for more information.
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Bob.moore@titoma.com +886 2 2727 2089 8F, 159 Songde Road 11085 Taipei Taiwan
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