Market Research for Arduino products

Hello,

I'll start by saying that Arduino is a fantastic product, backed by an excellent team and user base. It is a demonstration of easy to use technology, which makes it very popular.

My question is directed to the commercial companies who make products that support Arduino. It is "How do you conduct reliable market research for new product ideas?"

The point I want to get at is hardly any information is published about the volume shipment of Arduino, i.e. the microcontroller boards or its shields. No product roadmap is published to see what might be coming next. It's all a bit covert.

It seems that there is very little support for this important exercise before producing anything for sale. More than one business will have considered this, so why is it that the Arduino team appear not to support the commercial developer community? Surely this could only have a positive effect on Arduino units being shipped?

I am aware that the official line is "Arduino is not a commercial exercise". I'd politely disagree - it must be revenue generating because engineering overheads have to be paid somehow and you can't do that without making money.

I'd be interested to know from anyone out there who may enlighten me. Perhaps one of the Arduino Team may wish to comment?

Hi Solderflux,

Lot of bolds, lot of questions ;) why dont you introduce yourself to the forum?

so why is it that the Arduino team appear not to support the commercial developer community? Surely this could only have a positive effect on Arduino units being shipped?

I think supporting commercially would mean huge overheads and perhaps not the intent with which the project was started. I think arduino falls into the category for solutions which are not large scale and required to be developed by non-technical users. Artists, photographers, musicians, designers, doctors, web designers, etc. and most of the products developed are perhaps not that volume intensive for commercial support to be viable.

I am aware that the official line is "Arduino is not a commercial exercise". I'd politely disagree - it must be revenue generating because engineering overheads have to be paid somehow and you can't do that without making money.

perhaps it means that its not intended for commercial development purposes.

Hello pracas,

I am playing devil's advocate here with these questions, so let's understand that it shouldn't be seen as combative.

I simply introduce myself to this forum as an Arduino evangelist with a couple of business needs... I'm an electronics developer by profession who would love to support Arduino with a new range of shields and possibly more. Nothing sinister.

I have to disagree with your remark about the cost of supporting commercial developers. Most commercial developers are happy to pay their own way when it comes to feasibility studies. My point is that vital information about the size of a market does not appear to be available, which would otherwise assist their market research. Something along the lines of "We are told that 10k units were shipped to the UK in 2010, therefore we can project a market for 3k units of this new shield design in that country". How expensive would it be to produce a fact sheet about the Arduino market, strictly for commercial developers? I suspect not an awful lot.

I agree with your remark about the category in which Arduino belongs. But it is known that at least 50k Arduino boards were shipped only two years ago. The market is not insignificant as you are eluding to, and actually could be commercial with the right support.

Remember, Beagleboard and mBed also entered the low cost embedded market and have good developer communities. Both are backed by large semiconductor companies.

In regards to distribution, that is very tricky to track.. if not impossible. Bigger companies like sparkfun resell the boards, and they ship internationally. What does a starter want? I reckon a starter wants something to go with his arduino, some LED's for instance.. so they'd shop at a reseller. To get accurate data in regards to distribution, you'd have to ask every reseller about their sales records.. you won't be getting those though (and if you do, the company is in breach of various laws, including privacy ones).

Market research? post a poll or something in the active communities.. can't think of another way to get somewhat reliable data.

This should be in bar sport… Anyways arduino from what I see is for the diyers but some do commercially.

Imahilus, I'm not wishing to be impolite, but the query was about shipment numbers of Arduino boards and shields. It wasn't about electronic components, analysing personal orders or breaching data privacy.

The answer to my query comes from looking at the production quota, not purchase history.

Think about it. You're effectively saying that the "Arduino factory" doesn't know how many boards it has made and exported to the resellers. If this were the case, they would not know how to manage supply and demand - they'd under produce or over produce. Clearly this isn't quite right!

Unfortunately a poll would not get useful numbers. It may, however, give an idea of what people want.

"This should be in bar sport".

Why Chris? Is it not Arduino-related or something that people have asked a few times before?

Arduino products are being sold in Europe via RS Components - hardly the store of hobbyists; there is plenty of traction from industry.

I remind people to be constructive with their remarks, since this is a forum and it is meant to beneficial to all.

Distribution can easily be estimated from any of the distributors that show their current inventory. It would be fairly simple to write a script that would track Sparkfun’s (and others) inventory on a regular basis. Then maybe look at the inventory of Atmega328’s from the different distributors. Put those together and you could probably come up with a good global estimate.

I think most people that are designing shields or other Arduino devices let the market do the research for them. It’s very easy to design a unique shield, have a few boards printed and then use it for myself. If I write up a blog entry about it and people are interested, it ends up selling itself. You tell them to wait a few weeks for your production run and it turns into a product.

It is not the “Arduino Team’s” responsibility to provide any form of market research. The project is an open platform given to the community to pretty much be used for whatever the community decides. As an example… I am a web developer by day. If a potential client comes to me with a site to build, would it be my responsibility to provide them with the market research for their site? In most cases no. I build the site. Usually the site fails because they were expecting me make a market or hand this site to an existing market. I am just the developer… not the business man.

Thanks Jeff K, some useful remarks there. I can see some useful extraction from the site polling, though I figure that it will only tell you the amount of buffering stock allocated to each supplier. It may provide false data if goods are actually dispatched from a 3rd party distributor. Who can be sure?

Yes, I think that most developers trial a small volume production run, just to see how it goes. That's fine if it works for them, but if you're wanting to do anything more ambitious, then this approach is too risky! You need to forecast numbers based on market intelligence.

I hear what you're saying about responsibility of the "Arduino Team" and appreciate it. However, several aspects don't tie up. The message I'm getting is that Arduino is not a commercial exercise, yet I see international resellers - small outlets and industry giants too, indicating that sufficient volume is being shipped and used by hobbyists AND professionals.

The point is, unless the "Arduino Team" lead by example and aid the designers and suppliers of the user community to do their bit in the food chain, maybe Arduino as a product will decline as other embedded products take over the market. It would be a shame if that were to happen.

some things just aren't about money..............

if you build it, they will come

AMEN to above...

SolderFlux... welcome to the world of OPENSOURCE.... it's just different.

The last thing on my mind when I saw Arduino for the first time was

1) I want to buy a starter kit with all kinds of stuff 2) I want a pre-built tested board 3) I want all kinds of shields.

No to all of the above.

I wanted to assemble my own. (Thank you Adafruit) Point being here that ADAFRUIT Boarduino format is much more useful to me than a duemilanove, for example. I wanted Make my own (Yay Severino Single Sided Board) I had a bunch of collected electronic parts already. (hey, It can happen) I wanted to be real comfortable with Arduino before buying any shields. If the Arduino form factor were different, I might reconsider my less than enthusiastic attitude toward shields with the oddball size and messy offset pins (no offense intended massimo).

I wanted to mainly play with various sensors... (Yay Sparkfun, Mouser, Parallax) since I had gotten LED's out of my system in the 1970's...

All I am trying to point out is... yes.. a lot of us are DIY'rs and we are not all cut from the same cloth.

So... am I messing anything up by NOT buying all my stuff from Italy? I think not... and if I write any good code or create a design... I share it. That's the plan.

some things just aren't about money.............. if you build it, they will come

True... very true.. and in case of arduino the research you require will not guarantee results you expect. I think buyers look at the support provided by the sellers for various products, so you would have to provide excellent support and then expect numbers to increase. Thats whats happened with ladyada and others.

The last thing on my mind when I saw Arduino for the first time was

1) I want to buy a starter kit with all kinds of stuff 2) I want a pre-built tested board 3) I want all kinds of shields.

Agreed... When I first heard about the Arduino, I ordered a bunch of Atmega168's (Atmega328's a few days later once I realized what I was doing) and threw together the worst parallel programmer from all the scrap parts I could find. This was over a year ago. I just received my first Arduino Duemilanove and Mega boards yesterday. Not assembled or with parts... but bare and ready for me to assemble from scratch. But I must admit that the only reason I purchased those were for resale and to have something to prototype shields on. And again I plan on selling the shields. But I guess what I am getting at is that that like pwillard said, it is really hard to judge what anyone is doing.

Arduino occupies a position very similar to “development” or “evaluation” boards1 from assorted chip vendors, and you can probably get just as much information from the designers/manufacturers as you can get from Atmel about how many Butterflies or Ravens they’ve sold, or out of Intel about how many Woodcrest Eval MotherBoards they’ve made2. The add-on market, such as it is, is not heavily considered, and any given vendor’s numbers would be somewhat useless anyway (since there are so many “compatible” vendors.)

OTOH, have you tried asking for such data? Since none of the players are publicly traded companies focused on just the Arduino market, it’s not likely to be information that just shows up in some sort of annual report (nor is there big motivation to make it public.)

1 The target audience is somewhat different. Turns out that “microcontroller professionals” are quite capable of making use of “simplified” tools, compared to artist/hobbyist ability to use “complex” microcontroller tools. Go figure!

2 ie “none.”

Okay, since last night (for me in the UK) there have been a few more contributions to this discussion - thank you. I'll now reply in turn to each one:

donkahones - RE: "if you build it, they will come"

There is some truth in this I agree. But if you put yourself in the shoes of an electronics developer, wanting to make something and sell it, you need to have a good idea about the market and its size, otherwise it could be dead investment. Hardware development does not happen for free, even with the wildest ideals of the Opensource route!

Commercially, if you've no idea of how many boards or shields will be sold, then you cannot go to your finance controller or bank to ask for the money - you would not have credibility. For the individual it comes out of your pocket and nobody wants to waste their money on something that hasn't worked out.

pwillard - RE: "welcome to the world of OPENSOURCE"

Yes I know what Opensource hardware means, and I appreciate that it is different to Opensource software. Do you?

Opensource hardware has a real cost to the original developer, which means you need to make financial provisions to fund the venture. Money is needed for the development tools, manufacturing, testing and procurement of materials. Very different to the funding of software development and the hobbyist.

Jeff K - Surmises: "the fun is in the assembly of your own Arduino ideas."

Indeed it is. Most electronics enthusiasts start out by tinkering around with a soldering iron and a bag of bits. And now you can tinker around writing software too. It's so well done, that perhaps for the first time, non-engineers can use a microcontroller and have success.

Arduino appeals to a wide range of user types:

  • Hobbyists doing one-off experimental ideas and sharing them.

  • Academics who may use it as a platform for teaching or cheap development of research projects.

  • Creative people who find an affinity with technology and discovered Arduino for use in their installation artwork or exposition.

  • Professionals who see Arduino as a low cost, "no-brainer" development platform for their ideas. Some will be non-engineers who find the possibilities of Arduino very attractive, say in Medical, I.T. and automotive applications. And some will be engineers, like myself, who wish there was more technical capacity off the shelf.

Arduino should not exclude any type of user (unless they're up to no good). Therefore, it takes all types of developer to support particular aspects of Arduino and user needs.

westfw - RE:"OTOH, have you tried asking for such data?"

Yes I asked Massimo about the future of Arduino, and I suggested an enhanced platform as a concept. He responded, on copy to the rest of the Arduino team, but without saying anything too useful. He wished me well with the business, and welcomed me to the Arduino ecology.

My thoughts:

I aways got the impression that it all started because a few people thought it was a great idea. I work for a gigantic company that wouldn't stock the toilets with a different brand of toilet paper without endless research and cost/benefit analysis. However sometimes people just do things without thinking about it too much - very occasionally it works out. I suspect this road is littered with the corpses of many instances where it didn't. I wouldn't be surprised if the lack of sales data is due to the people involved having more important things to do. In terms of your comments about revenue - what would you call engineering costs? People's time developing? I've spent days and days working on a couple of projects. I'm not interested in IP rights or anything like that - if anything I've done can help others, they're more than welcome to it. I suspect many people involved in open source are the same. I think it's the same as looking at a charity with the eyes of a commercial organisation - it just doesn't make sense. What's in it for these people? It varies - but the only thing you can pretty much be sure of is: it's not the money.

Wow I'm rambling like Grandpa Simpson today.

Hello daveg360, I agree with most of the things your saying.

According to various articles about Arduino, it started life in Academia. That tells us the funding came from within a University department, and at some point, there was a thought about making Arduino a commercial proposition by its inventors. Perhaps without the teeth of corporate acumen, but still a revenue generating scheme.

I'm not suggesting that Arduino should be turned into a commercial monster that will alienate its original followers and put an end to its open source nature. Remember that Arduino is great for many types of user and let's not detract from that.

What I am trying to do is explore ideas to improve Arduino's usefulness to professional developers. But I'd want a return on my investment for developing new hardware. Resellers (e.g. Sparkfun and RS Components) have to make money to pay their bills. So there is nothing rebellious and shocking about wanting to charge for physical products.

So what's involved in development costs for retail, you ask? Money is spent on:

  1. Licensing CAD tools for PCBs (on "for profit" terms).
  2. Procurement of electronic components.
  3. The manufacture of the boards.
  4. The required tests - manufacturing tests for quality assurance and electrical compliance (e.g. CE mark).
  5. Getting the product out to the distributors and being sold.
  6. The developers time if they are to earn a living.

In academia, a grant fund would cover the costs, and intelligent labour is somewhat voluntary. The end goal is different, because academics aren't generally interested in making big money from their ideas, but sharing their findings. Sound familiar?

I used to work for a well known semiconductor business. The finance controller had asked engineering departments to work out cost per head of its employees. After the costs of EDA tool licensing were added up and divided by the headcount, we cost something extortionate per day as our booking cost! At that rate of burn, you need a good cashflow. But that is how it works.

I think people need to learn and respect that Opensource hardware does not mean "free of cost" as it does for software. It just cannot be at zero cost for everyone. Yes I acknowledge that the Arduino team have published a few reference designs, and the developer community have shared their work, but you can see that the originator of this process had to give out in the first place.

I say let developers decide the value of their work. Those who want to do it for free, carry on unaffected, but those who need to charge something for their work, please can the Arduino team provide information of use to market research activity. Both routes lead to enhancing Arduino in my humble opinion.

The information desired is a breakdown of production quota out of the Italian factory and to where these boards were sent to by country, year on year. We don't need to know who the resellers are or the quota they individually received - everything can remain anonymous. Protect the information via non-disclosure agreement to be controlled about it.

Here is my opinion (Solderflux, like you, I am making assumptions):

The Arduino project is the result of the merging other already existing open source ideas/projects. (Wiring and Processing) The original WIRING board that influenced the Arduino's design was much more expensive and Arduino grew out of the desire to have a simpler, more affordable hardware solution.

It was made easier by the fact that the GUI design existed (WIRING) and the back-end open source compiler existed, AVR GCC.

Assuming that there was a huge development cost... like those involved in creating a solution fro the ground up... might be a bit of a stretch. I'm not discounting what the team has done... I'm just saying that it was the re-usability of existing open source projects that made Arduino easier to develop.

As for CAD... I believe that the board size is below the limitations of the low-cost/free EAGLE CAD software so maybe an expensive CAD solution was not considered part of development cost.

The information desired is a breakdown of production quota out of the Italian factory

If this information is available, it may not be as useful as you think. No one knows how many hundreds of boards are being shipped from China. There are also plenty of distributors who do not sell an "official" Arduino. They could be printing the boards themselves or getting boards from China. There could be 2x - 10x more Arduino clones being produced by third parties.

But in the end, the more information you can get the better. If the Arduino team has this information to release it will be helpful. It may not be enough to woe over some investors, but it should tell you if you can support your development costs.

BTW- I have tried contacting the Arduino team in the past for information on obtaining/licensing and selling "Official" Arduinos. They never responded back to me. If they don't have the time to do that, chances are they don't have time to respond about market research.

Opensource hardware has a real cost to the original developer

This is a poor assumption imo, despite everybodies claim that it costs nothing to duplicate the bits in the program, compared to hardware stuff.. software takes just as much time, if not more, to create. Time is money, and especially in the world outside of opensource software.. expect to pay for absolutely everything (OS, editor, e-mail, libraries, online services, etc. etc.). Why is it easy to ignore the nights you spend coding, and not the couple of cents for that diode?

That aside (since it has little meaning to the actual topic, just wanted to share that bit), you raise an interesting point in regards to proffessionals. The arduino platform isn't intended for proffessional use (as in, to end up in the final product), but, it can be a fantastic (simple) prototyping tool.. which it is being sold as. The proffessional makes a prototype with the arduino, and if it is well received by the financers, develops his or her own print with the atmel chip, and sells that... And that is the key difference, suddenly it isn't an arduino anymore! This also means it is suddenly an entirely different market, suddenly you are selling to the 'ignorant masses', instead of people who are interested if not specialised in the area of hardware.