Custom case designs... (the business perspective)

[Matthew S. Hamrick]

Also.. to follow up on what Adrian recently said.. The tech shop also  
has a CNC milling machine. I'm no expert, but I believe that the idea  
is that you put a CAD file in one side and take out a completed part  
out the other. So... if you have the CAD files for a case, you could  
feed them into the CNC milling machine instead of the 3D printer and  
viola! aluminum case.

Jim Newton at the TechShop also mentioned he's looking into getting  
an injection molding machine. I've seen a couple of these sorta 1  
shot injection molders. You use the CNC machine to create your mold,  
then you pour plastic pellets in the top, press a button and an  
electric motor turns the screw that forces the semi-molten pellets  
into the mold. So.. you could have any number of different cases made  
for your Neo.

My "back of the envelope" calculations for the cost are:

Fixed Costs:
	Mold Design Time	5h		$0
	Mold Milling Time	3h		$75

Variable Costs: (per production run)
	Mold setup			1h		$10

Variable Costs: (per case)
	Plastic Pellets		(1/10)h	$3

So assuming a CAD file for the NEO case were to magically fall out of  
the sky, perhaps as part of a program to seed a third party ecosystem  
(*hint*hint* Sean, are you going to be in the bay area soon?  
*wink*wink*) The cost per case for a production run of 10 and 100  
identical cases would be:

10 cases: 9h, $115
100 cases: 18h, $385

Let's say that I'm terribly impressed with myself and I want to pay  
myself $65 / hr. for my time, the price goes up to:

10 cases: $700
100 cases: $1555

But I'm not going to sell them myself. I'd rather sell them through  
SparkFun or even GumStix.com (but I don't know if either of these  
guys would be interested.) So, I'm going to add a little bit of  
margin. This is a risky business, so I'm adding 35%.

10 cases: $945
100 cases: $2100

Nathan and/or Gordon are going to want a margin as well, but I'm  
thinking I'm going to offer them a low-risk proposition: "just put  
the SKU on your website and I'll handle the fulfillment." So I'm  
going to argue them down to 7% margin. So in other words, I'm going  
to pay them a commission for every case they sell. That fee would be:

10 cases: $65
100 cases: $147

We're not talking about a lot of coin, here. From a business  
perspective, the reward of $147 for selling 100 isn't that great.  
It's probably not going to pay for Nathan or Gordon's time to setup  
the SKU in their system. But there's always eBay...

Let's say sales taxes are an additional 8.5%:
10 cases: $86
100 cases: $191

Shipping and handling:
10 cases: $90
100 cases: $900

End Price:
10 cases: $1186 ( $118.60 per case )
100 cases: $3338 ( $33.38 per case )

So... the question is...
	a) is it possible to convince Nathan or Gordon to sell these things  
through their websites for $65 - $147?
	b) is there actually a demand for 10 or 100 of these after-market  
cases?
	c) is there a "one size fits all" design that will satisfy everyone  
who wants an after-market case?

So, I'm not saying I want to get into the business of making after- 
market Neo cases, but someone who was thinking about getting into  
this market would do an analysis just like this. So... if there was a  
solid demand for 100 cases, it's possible the price could be brought  
down to about $35-$40.

On Jul 3, 2007, at 10:18 AM, Frederic Kettelhoit wrote:

> 2 points:
>
> 1.) Aluminium would be quite cool. I would like to have such a  
> case, too. But the problem is, that the gsm radiowaves are not able  
> to pass the aluminium. Probably that's the same with the GPS and  
> the W-LAN? I don't know. There is mobile phone made by Porsche and  
> - I think - Sagem. It is basically made out of aluminium, but the  
> GSM Processor is mantled with plastic. Quite difficult, but very  
> cool IMHO. Does anyone know, whether there is the possibility to  
> make a case 100% aluminium without making the GSM processor  
> useless? Would be great.
>
> 2.) The rounded corners are not very pretty, that is right. In my  
> opinion a phone has to look quite good, it is a lifestyle item. A  
> few people may like the design, but the great majority of people I  
> asked said that they hate these corners (me too). I would buy an  
> ugly but open phone, but many won't. So it would be really really  
> great, if there would be the possibility to change the case. I will  
> try to do it, too, but I am not very familiar with case modding and  
> mobile phone cases in general.
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