Author Topic: What am I missing here?  (Read 699 times)

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Mark W

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What am I missing here?
« on: January 27, 2016, 08:08:54 PM »
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Raspberry Pi 2+: $35
Arduino Uno: $20
Arduino Pro Trinket: $7

TCS Decoder: $50!?

I used to be able to pick up my K1D4's for 24 bucks from the big discounters.  Now the lowest I can find it is 38.  Pretty sure Moore's Law goes the other way!  What am I missing here?
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Scottl

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Re: What am I missing here?
« Reply #1 on: January 27, 2016, 08:16:43 PM »
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Economies of scale (or not, in the case of DCC)

reinhardtjh

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Re: What am I missing here?
« Reply #2 on: January 27, 2016, 08:32:17 PM »
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Economies of scale, inflation.  I'm pretty sure TCS's decoders are made in the USA but I could be wrong.  I know Digitrax had it's own SMD soldering line for it's stuff.

Could also very well be the cost of the no hassles warranty that TCS gives.  It all depends on how many decoders get sent back.  I really doubt they recycle them.  Probably pitch them to electronic scrappers.
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railnerd

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Re: What am I missing here?
« Reply #3 on: January 27, 2016, 09:06:12 PM »
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Raspberry Pi 2+: $35
Arduino Uno: $20
Arduino Pro Trinket: $7

TCS Decoder: $50!?

As others have mentioned, the volumes on "hobby electronics" are a great deal larger than the model railroad electronics industry... and they are still dwarfed by the volumes on the mobile consumer electronics business.

It is also important to remember that the Raspberry Pi foundation is a non-profit foundation started by Broadcom when an employee had a great idea to make use of a TON of set top box chips they had in a warehouse.  The price is very close to COGS (Cost Of Goods Sold), and has also backed by some other grants to get off the ground.  The Raspberry Pi Zero is almost certainly named after the profit margin.

I have friends in the model railroad electronics business. Retail price for the DCC business is usually between 3-6x the COGS.  So a decoder with a $50 MSRP is probably $10 in total cost.  My friends have yet to generate revenue to cover their startup costs— most of the money they have made is in custom layout consulting/construction.

-Dave

peteski

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Re: What am I missing here?
« Reply #4 on: January 27, 2016, 09:36:47 PM »
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Wouldn't the intellectual property (the custom-written FW programming in the microcontroller) be a part of the cost?  The otter devices IIRC run some flavor of Linux (which is free).
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reinhardtjh

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Re: What am I missing here?
« Reply #5 on: January 27, 2016, 11:44:42 PM »
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Wouldn't the intellectual property (the custom-written FW programming in the microcontroller) be a part of the cost?  The otter devices IIRC run some flavor of Linux (which is free).

No doubt, but does that explain the price increase?  Take the Z2 decoder.  The MSRP currently is $48.95 -->http://tcsdcc.com/Zen/index.php?main_page=product_info&cPath=43_60&products_id=284

Three years ago the MSRP was in the mid $30's and discounted to around $27.    Now MBK sells them for $39.99.  Did they do that much R&D on a previously established decoder?  Digitrax prices have increased as well, but I don't think as much.


Bucking the trend, ESU's LokSound Select V4 has actually dropped in MSRP from $159 to $139 and the Select has dropped around $15 from their first prices a few years ago. But they are produced in Germany so the exchange rate probably has something to do with it.
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Mark W

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Re: What am I missing here?
« Reply #6 on: January 28, 2016, 12:03:42 AM »
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Three years ago the MSRP was in the mid $30's and discounted to around $27.    Now MBK sells them for $39.99.

Yes, this is my main confusion.  Granted, TCS has definitely upgraded some of their components like the surface mount LEDs and thinner PCB material, but that surely can't account for such a large percentage price increase from before.  This is especially where Moore's Law should have come into play. 

I get the whole economies of scale thing, but I still have a difficult time believing a lessor volume production of a DCC decoder with only about 10-20% of the individual components of a larger run micro-processor board still ends up being roughly twice the MSRP. 


Sound decoders are a great comparison!  I remember paying close to $160 for a Micro Tsunami about 5 years ago now.  Retail is now 140, with major discounters as low as 99 at times. 
« Last Edit: January 28, 2016, 12:05:47 AM by Mark W »
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peteski

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Re: What am I missing here?
« Reply #7 on: January 28, 2016, 12:17:44 AM »
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Maybe TCS is trying to recoup all the R&D and development costs they put into their new sound decoders by increasing prices of all the decoders?  :D I really have no idea.

I did ask them, few years back, why their decoders were more expensive than comparable Digitrax ones. IIRC they told me was because TCS fully manufactured their products in USA while Digitrax has them assembled offshore.  Not sure how accurate this is.

I also didn't realize that they jacked up prices for their older decoders.  That does not seem to compute.  Maybe the parts they use on those decoders are obsolete and hard to get (which usually demands higher prices)?  If that was the case, they should just come out with new line of decoders (smaller and cheaper than the older ones).  Just speculating...
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ryan_wilkerson

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Re: What am I missing here?
« Reply #8 on: January 28, 2016, 12:44:23 PM »
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I've noticed this too Mark. I like TCS (had to use the warranty a couple times and it was painless).
I don't mind paying a bit more if it is being built in the USA.
Just did a search and found this about a 15% increase. Some of the prices seem to be up quite a bit more than that.
http://www.traintekllc.com/news/tcs-15-price-increase-july-1st-2015/