Market Research for Arduino products

pwillard: Surmise:“Your opinion of how Arduino evolved”

Projects like Arduino would not have taken off if it weren’t for a few free goodies oiling the wheels. The most obvious factors are the cost savings for two key elements which enabled a developer community:

  1. The free GNU AVR C compiler, running on all host platforms. Ten years ago, you’d be paying GB£600 for a good compiler.

  2. Eagle PCB software with a free “not for profit” edition, running on all host platforms. Normally this costs anywhere between GB£700 to GB£3000, depending upon the capability.

Add to this an IDE for all host platforms, and you have a wonderfully successful formula.

The rest of the story is pretty run-of-the-mill for projects in academia.

Jef k: Re:“If this information is available, it may not be as useful as you think.”

All that’s required is a proportional representation of the market, and for that data to be truthful - you can be satisfied with that and some assumptions about the Italian / Far East manufacturing split.

The official line from the Arduino team is that you have to call your Arduino clones “Arduino compatible” - you may not call them “Arduino” or imply that they are official/genuine. Also, suppliers are told that if they want to sell genuine boards made in Italy, there is a minimum order take. With the clones being up to 50% cheaper, what do you think happens?

Herein lies the problem with Opensource hardware. The Arduino team make their boards in their own factory, but because they published the design, they soon get beaten up at their own game by manufacturers in the Far East who produce clones ten to a penny. The reason is that not all people respect the ecology. The reality is a diminished revenue stream for the Arduino team.

Imahilus: Re:“Poor assumtion”

Yes both hardware and software have inherent development cost. But you cannot download physical hardware can you? Hardware additionally has a cost of producing it in physical form. And besides, it was the “softies” who came up with Opensource in the first place! ;op

So no, I don’t agree. I think I need to defend the value of hardware developers, because as some people assume incorrectly that it is just about discrete components being put together. There is a lot more skill to it than you’re seeing, believe me. The couple of cents diode is that price because it is the result of hardware engineers spending years to perfect the manufacturing process.

I do agree with you about it being a good prototyping platform.

No need to defend the hardware guys :) Just when it comes to hardware vs software, don't lift one above the other. The couple of cents for that diode is a result of the lineage of engineers (both software and hardware). Too often to people think software is free, opensource just means somebody invested their time (and thus money) in it, and is hoping it will help you out (whether it is a hardware or software design, doesn't really matter). But that angle has allready been covered by somebody else ;)

Projects like Arduino would not have taken off if it weren't for a few free goodies oiling the wheels. The most obvious factors are the cost savings for two key elements which enabled a developer community:

  1. The free GNU AVR C compiler, running on all host platforms. Ten years ago, you'd be paying GB£600 for a good compiler.

  2. Eagle PCB software with a free "not for profit" edition, running on all host platforms. Normally this costs anywhere between GB£700 to GB£3000, depending upon the capability.

Add to this an IDE for all host platforms, and you have a wonderfully successful formula.

The rest of the story is pretty run-of-the-mill for projects in academia.

And the point of what you are trying to say escapes me at the moment. Sorry, I am trying to understand.

The barriers to success for Arduino were almost not there...

This is not 10 years ago and the compiler was free and open source. The cad software was not expensive. The IDE was basically already developed.

I see that the Arduino team were most excellent at system integration.

I really think you are trying to force 1960's Technology company attitudes towards the ARDUINO. I think that's going to be some work for you to accomplish.

This thread has gone way over the level that I normally think about things, but if somebody has an idea for a product then they can simply post a few details about it here and see if there is any interest from the people on the forum. It has been done before.

If something is going to cost a considerable amount of money to develop and produce, how will it be protected from being copied once it is made available?

What can be fitted onto an Arduino shield that needs such an amount of analysis before a prototype is produced and shown to the community?

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

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

Yes I asked Massimo about the future of Arduino

"Futures" and "current marketing data" are quite different things. You can read Intel's annual report and get a good idea how many Pentiums they are shipping, but if you want the roadmap of what's coming next you better be a big enough company to make it worth their while to have their non-disclosure marketing team visit you...

(and, an "enhanced platform" suggestion is less likely to receive attention compared to "shield" type products. My impression is that the Arduino team would like to maintain pretty tight control over the core platform...)

Opensource hardware has a real cost to the original developer

This is a poor assumption

"development" may be as cheap for hardware as for software, but actual "deployment" of hardware requires buying real parts and pcbs and things. Ie The (nkc) "freeduino" development was free (donated time), right up until Tony ordered 100each of 4 different PCBs to see if (a) they would actually work. (b) how assembly of the different SMT sizes actually worked. It's worth noting that most of those boards were never sold as products, so that was a significant chunk of "real money." Actually selling the final version requires maintaining an inventory of parts; more real money (and a pretty thorny business problem, judging by the amount of energy that major companies spend controlling inventories...)

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.

Assuming someone is starting a social entrepreneurship venture, they first have to be convinced of the cause and be willing to give their best to it before working out the financials (even accept the fact it will be profitable only in the long run!) Your way of looking at data is like saying first lets look at the financials before deciding to believe in the cause.

What can be fitted onto an Arduino shield that needs such an amount of analysis before a prototype is produced and shown to the community?

true. I suspect there are few things left that have not been tried. There are enough people around who've tried and put a whole lot of things on the arduino.

Imahilus: RE:"The couple of cents for that diode is a result of the lineage of engineers (both software and hardware)."

Um. Were software engineers involved in the first ever diode? ;op

The better person is actually the engineer who considers all of the problem; hardware and software as a whole.

pwillard: RE:"And the point of what you are trying to say escapes me at the moment..." + "1960's Technology company attitudes..."

The point I am saying is that the Opensource hardware concept of Arduino wasn't viable until key software tools became free to the public - a compiler and PCB editor. Imagine if the Arduino community had to pay for these key software tools... You'd still all be writing in assembler and mail ordering your PCBs from electronics magazines. Arduino is a technical revolution in a way, because it brought together all the key ingredients.

Your remark that PCB software was never expensive - this statement is totally opposing to the ethos of Opensource where everything is meant to be free. A proportion of the Arduino community don't like paying for anything it seems! (Take that with a pinch of salt).

I was amused at your rant about "1960's..." whatever - you have absolutely no idea of my age or employment history, and it showed when you made that remark. Keep it constructive.

jabber: RE:"trying an idea" + "what's so secret and how can it be protected from being copied"

Yes, you can make something for Arduino and trial the uptake - I've been conversing with a person about that very approach; by far the best constructive thing I've heard and outside of this forum. The point of this thread was to gain some insight into how money could be best spent on developing a new product or two. The discussion appears to be an emotive subject for its readers, but I remind people I am not breaking Arduino as a concept. And there isn't a secret to reveal.

westfw: RE:"'Futures' and 'current marketing data' are quite different things" + "'development' may be as cheap for hardware as for software"

Yes futures and current marketing data are often different. But "market research and projection" is how some of the leading technical companies plan and execute their ventures. It is standard practice and I'll be using it thanks.

There are different expenses of hardware development. For example, you can cheaply put together shields built from commercial ICs, e.g. logic gates. But if you want to do something more functionally intensive (and useful), then development costs will increase in pursuit of that goal. The point being not all hardware development is cheap, especially if you're starting from scratch. You're going to want to know financially if it is worth your while.

pracas: RE:"Your way of looking at data is like saying first lets look at the financials before deciding to believe in the cause."

Believing in the cause does not eliminate the need to be realistic about resource (i.e. funding). Hardware development is not free; Cash is King. The point of this, I feel I have to repeat, is to determine viability of the exercise and to plan how best to spend some development money.

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I'm done here for now. Thanks to those who contributed constructively.

Well I don't come from a professional background on marketing of arduino shield products. However I do think I am a typical Arduino user and I have come to expect that any shield hardware I buy comes with published schematic and open sourced firmware and libraries if used. I have no problem buying the product instead of downloading the design and building my own version, but now that I have experienced what open sourced hardware and software offers me, there is no way I would go back to proprietary products. It's just a hobby for me, so I can afford to take that stand. Check out SparkFun site http://www.sparkfun.com/commerce/categories.php?c=103 , they sell many Arduino products that they have developed and usually always post the schematics and source code on the products they designed.

I'm not saving you can't come up with a proprietary profit making product, but I do think it will be a hard sell if some of the expected market comes from the existing Arduino user base if the design is proprietary in nature.

Lefty

Yes I have determined the "resistance"!

Yes I have determined the “resistance”!

Good for you. :wink:

I was amused at your rant about "1960's..."

;) Not a reference to your age... I was comparing current day to that "era", which was known for very proprietary and restrictive practices when revenue, marketing and pricing was a very closed loop. Current day companies like Apache, Mozilla, and Symbian are marketed almost entirely by the community that supports them for numerous reasons.

What is different now is that many companies also recognize the value of the web connected community. It is not just the small group of guys that put the Arduino together that are responsible for it's success. It is the community that they fostered that contributes to and showcases the real success of Arduino design. An active vocal community will tell you what they want and what they don't like... almost immediately. How's that for taking a shortcut in Market Research? How much money does that save?

As was mentioned... some people have sunk some cash into Arduino projects... knowing that they might not ever make their investment back. This is an era where someone like Ryan McLaughlin can create a very niche item, like the MAX6675 thermocouple interface and do just what I'm talking about. He may sell only only 1 or he may sell 1000... but he was willing to try regardless of the outcome.

Yes I have determined the "resistance"!

I don't think it is resistance, I think it is reality. Most people here have an idea what the Arduino is about, education, hobbyists & minimal profits for some recovering costs for others.

Okay, so some conclusions to this thread:

  • Arduino is not officially a commercial exercise - it is largely a charitable engineering project.

  • Development is discretely funded by individuals who may not care about financial remuneration.

  • The amount of funding decides your approach to development regarding tools and raw materials.

  • The developer community is very diverse - Arduino means something different to each class of user.

  • The different classes of user may disagree when they cross viewpoints about "contribution intent".

  • The views of several active forum members are probably not a full picture of the Arduino developer community, but a start.

  • There may be opportunity to make money out of Arduino, but possibly limited due to downplay from the community.

  • Arduino has enabled non-engineers to use embedded computing and released lots of excellent creativity.

And the debate will go on (possibly without me).

There may be opportunity to make money out of Arduino, but possibly limited due to downplay from the community.

That really depends on what you consider arduino, and your market. Plain and simple, arduino is for the people who like to muck about with hardware. If you mean catering to this market with 'make money out of arduino', then your conclusion is allright. But then you'd be negating the entire end-consumer market who just want stuff that works magically. Arduino is simply a ladder to develop such products, those products wouldn't be considered arduino anymore imo.

I reckon you're confusing the recommendation of moving away from the 'arduino platform' to integrating the atmel chip itself in your project for an attempt to dissuade you from using the arduino to establish a commercial product entirely.

What I am trying to do is explore ideas to improve Arduino's usefulness to professional developers.

I don't think that Arduino is particularly interesting (as a product component) to "professional developers." Even among the amateur community here, one of the FAQs is "how do I get rid of the $30 arduino once my gadget is finished." There just isn't enough TO an arduino to make it interesting as a raw part. (Now, it's interesting AS A TOOL to a professionals, but that's different.)

Arduino is not officially a commercial exercise

This depends on how you define "commercial exercise." Evaluation tools, educational devices, and (existing or would-be) electronic hobbyists are all real markets. But they don't seem to be the sort of thing that you are interested in. The "open source hardware manufacturing" panel at Maker Faire had a good half-a-dozen companies of varying size claiming to be profitable, which is ... more than you can say about a lot of "commercial companies"!

Open Source isn't as new or revolutionary as its pundits would have you believe. It's true that modern tools and infrastructure make easier than it used to be, but you can probably think of any project published in an electronics magazine as "open source." Machine readable schematics/pcb files/software are not a requirement of the concept, and if things like Dartmouth Basic and WatFor were mostly handed from one university to another because no one else had computers, that doesn't mean that the principle wasn't there. "Open source Microcontrollers" probably date back to Basic-52 (the 8052 being one of the first microcontrollers, after all.) Like Arduino, it was mostly a sort of "reference design" for a minimal system and some clever software.

PS: Dartmouth BASIC: 1963... "Steal from your friends" DECUS, established 1961...