Saleae logic price increases and interesting blog post explanation

[LabSpokane]

It's surprising to me how focused everyone is in the metal case.  The soft case probably costs more than the tiny, metal box. Plastic is cheaper in volume, but comes with its own peccadillos from a management and overhead perspective. 

[Corporate666]

There is a right tool for the job, and that tool is the one that gets the job done well with the least extra expense for the person doing the job.

But that's the rational engineer viewpoint - and consumers aren't rational engineers.  Neither are engineers.  If we were, we would all buy the lowest price car that performs the transportation function.  There would be no BMW's, Mercedes, or Audi's.  There would be only one vehicle in each segment - it would be the least expensive option that gets the job done.

But I'd wager that just about nobody on this site own the car that was the least expensive choice in achieving their transportation needs.  Because we don't choose what we need over what we want.  We go for what we want almost all the time.  That's the whole idea behind branding.  People buy a brand because they associate various characteristics and values with a brand, and they feel those characteristics and values match those of themselves, OR (perhaps more importantly) match the characteristics and values they wish they had. 

So millions of us run out and buy the new Tiger Woods golf clubs because we want to be Tiger Woods.  Or we buy the Lance Armstrong TDF winning cycling outfit replica, because we wish we were like him.  Or your wife buys a Chanel or Gucci bag, or you buy anything other than a $3 watch.

The Salae case doesn't cost $50.  It probably costs them $5 or less in total to add to their product.  But if they dropped it and cut the cost to the bare bones - then they are no different than the Chinese POS supplier.  And there is just no way Salae can compete with the Chinese guy selling logic analyzers for $10.  They differentiate by going upmarket.  But that alone isn't enough - they have to build a brand and make people want to buy into the brand.  They do that with a certain look and feel that carries across their brand.  That's the reason they have a very schmick (as Dave would say) website, schmick software and schmick hardware.  It's all part of the brand that they want people to buy into.

And many, many do - even intelligent engineers.  Because we all want to buy beautiful things.

[Corporate666]

They are essentially stuck with the business model they started with at this point.  The point I was trying to make is that by using a machined aluminum case for the sake of having some "bling" they increased their parts cost and lowered their profits per unit.  Since they are increasing their prices to their customers now, that means they aren't making a good enough profit per unit, or aren't selling enough units.  Increasing the prices is just going to piss customers off when they could have started out with lower prices and plastic cases and sold even more units.

You're hung up on this idea that the aluminum case increased their cost and lowered their profits.

It just simply doesn't work like that.  Companies don't sit around and figure out their costs... then add "a reasonable margin" and price their products that way.   Not unless you are selling a total commodity like oil or orange juice.

What the market will pay is unrelated to what something costs to make.  There are countless products that don't get made because the amount that people will pay for them is lower than their cost to manufacture.  So Salae doing away with the aluminum case would have absolutely no effect on their retail price, other than the fact that it isn't then pitched as a top-shelf bit of kit with a top-shelf price.

And then they are competing with the Chinese, and may as well just close the doors and shut off the lights.

[cosmicray]

It just simply doesn't work like that.  Companies don't sit around and figure out their costs... then add "a reasonable margin" and price their products that way.

Of course, but the question is how much more money could they have made if they used a cheaper plastic case, and then charged their customers less while still making the same overall profit.

If the marketing / sales-advantage of using the milled Al case outweighs the cost of the case, then the point is moot. The Chinese have proven that they can make something that looks like an iPhone. It just doesn't behave the same way. That is the challenge that Saleae is facing ... how to look like it's worth that price, and how to deliver that level of real value (while putting enough alligators in the moat to keep the imitators away).

[alank2]

Companies don't sit around and figure out their costs...

Some probably do and some probably don't.  If you have a product that will only sell at a certain price point, and there may be many factors determining that such as competition or usefulness, you may have to have a certain price point and then your only other option is to work out the cost side so that you have a profitable endeavor.

Personally I think the metal case is brilliant from a marketing and aesthetic point of view.  Did you guys see the video Dave had recently?  The Saleae looked very nice and the plastic one looked very terrible.  I realize this has nothing to do with their features and capability, but it is still human nature to want something nice.  If it costs them $10-$15 bucks more and separates them from their competition, that is a smart choice.

The thing is with Saleae that you don't just get a metal case.  You get a 6 month return privilege, 3 year warranty, the guys who made it advising you how to use it, and software that is multi platform AND you can write analzyers for it, and it is easy to learn and flexible.  Sure there are always improvements to be made, and one great thing about this recent year with Saleae is that they are pumped about it.  The software has really grown from what it was, and it is still simple to use.

[MarkL]

The metal case may also have been done for heat dissipation, at least for the newer models.  I have the Pro-16, and it does get warm (about 32C).

EDIT: Updated temp from 30C to 32C.  My probe hadn't reached equilibrium yet,

[IanB]

The thing is with Saleae that you don't just get a metal case.  You get a 6 month return privilege, 3 year warranty, the guys who made it advising you how to use it, and software that is multi platform AND you can write analzyers for it, and it is easy to learn and flexible.  Sure there are always improvements to be made, and one great thing about this recent year with Saleae is that they are pumped about it.  The software has really grown from what it was, and it is still simple to use.

The real thing is you need to know your market. If Saleae's sales are being eaten into by cheap clones that don't provide all of those added values, then Saleae is apparently not addressing market demand in an accurate way.

You can find examples where vendors say, "You have to buy our premium priced product with features you don't want, because we are the only choice you have, so pay up or go without." This may seem good for the sellers, but it causes customers to buy with a bitter taste in their mouth, and your customers certainly won't like you, nor will they be willing to give you repeat business.

If I don't want a metal case, a 6 month return option, a 3 year warranty, or extensive support, where do I go? Presumably I go to the competition.

[alank2]

If I don't want a metal case, a 6 month return option, a 3 year warranty, or extensive support, where do I go? Presumably I go to the competition.

Indeed; that is the market all right.  Each person chooses with their own $$$

[Bassman59]

It just simply doesn't work like that.  Companies don't sit around and figure out their costs... then add "a reasonable margin" and price their products that way.

Of course, but the question is how much more money could they have made if they used a cheaper plastic case, and then charged their customers less while still making the same overall profit.

To do the "cheaper" plastic case, they'd have to pay for the molds and a minimum-quantity order which may have been more than they could afford or reasonably expect to sell. They may very well have a local shop who can CNC mill the enclosures out of aluminum blanks, and the cost works out in their favor.

[Smokey]

If I don't want a metal case, a 6 month return option, a 3 year warranty, or extensive support, where do I go? Presumably I go to the competition.

Indeed; that is the market all right.  Each person chooses with their own $$$

+1

[MattSR]

I purchased the Saleae and I think it's great. I'm sure there are analysers that could do what I want at a cheaper price, but, I like the design of the software, the device, and the fact that you have direct support from the engineers working on the product. You certainly don't get that with the cheap Chinese devices

[Rigby]

What's the deal with the metal case? It can't add too much to the product cost, especially if you consider the setup cost of a plastic mold. On the other hand, it may add to the image of the company and help justifying the steep cost of the product.

Machined cases are a lot less spendy than they used to be.  They're about the same price as injection molding, according to Dangerous Prototypes.

In addition to being very nice, it is likely a bit of a heat sink on longer captures.

[Smokey]

...Machined cases are a lot less spendy than they used to be.  They're about the same price as injection molding, according to Dangerous Prototypes....

I couldn't find the reference on Dangerous Prototypes.  Do you have a link? 

One unknown is how many Logics Saleae actually manufacturers.  That will have a pretty big influence on the price breakdown of both types of cases. 

[coppice]

I purchased the Saleae and I think it's great. I'm sure there are analysers that could do what I want at a cheaper price, but, I like the design of the software, the device, and the fact that you have direct support from the engineers working on the product. You certainly don't get that with the cheap Chinese devices

That depends a lot on how good your Chinese is. Only last week we got very satisfactory support for a cheap logic analyser, by instant messaging, from its actual developer in Beijing.

[MattSR]

That depends a lot on how good your Chinese is. Only last week we got very satisfactory support for a cheap logic analyser, by instant messaging, from its actual developer in Beijing.

Absolutely, I don't know Chinese which is why I'm happy to pay for the Saleae

[zapta]

In addition to being very nice, it is likely a bit of a heat sink on longer captures.

That's a good point.

[Rigby]

...Machined cases are a lot less spendy than they used to be.  They're about the same price as injection molding, according to Dangerous Prototypes....

I couldn't find the reference on Dangerous Prototypes.  Do you have a link? 

There was a link earlier in this thread somewhere. 

This is it: http://dangerousprototypes.com/forum/viewtopic.php?p=59389#p59389

edit: added link.

[cosmicray]

...Machined cases are a lot less spendy than they used to be.  They're about the same price as injection molding, according to Dangerous Prototypes....

I couldn't find the reference on Dangerous Prototypes.  Do you have a link?

This may be the thread ...
http://dangerousprototypes.com/forum/viewtopic.php?f=19&t=6760&p=59369

[Smokey]

Cool.  Thanks.  That's interesting stuff.  It will be very interesting to see what the final price is for one of those cases in small batches.

One thing I don't get is from this quote from the link:
"I ... recall an interview where Joe says because of Apple milled aluminum is as cheap as injection molding for small runs. "

I'm not sure how apple using milled aluminum really makes that process any cheaper though.  It's not like they invented a new way to machine aluminum.  It's still setup time, and machine time, and cleanup time, and anodize time, and pack and ship time.  You can't really cut those corners.  If what he's trying to say is that for small quantities the cost of a injection molding die is more than paying the high unit cost of machining aluminum, then ya I can probably believe that, but the question then is how many do you plan to make over the lifetime of the product?

[Rigby]

I'm not sure how apple using milled aluminum really makes that process any cheaper though.  It's not like they invented a new way to machine aluminum.  It's still setup time, and machine time, and cleanup time, and anodize time, and pack and ship time.  You can't really cut those corners.  If what he's trying to say is that for small quantities the cost of a injection molding die is more than paying the high unit cost of machining aluminum, then ya I can probably believe that, but the question then is how many do you plan to make over the lifetime of the product?

It doesn't matter if you (or me, or anyone) can't work out how the price dropped.  Apparently, it dropped.

The process probably isn't cheaper, you're right.  But, I'll bet there are a lot more places around doing aluminum molding & milling, and competition alone will drive the price down.  So, probably, margins have gone down, and that could be why it's less expensive, now.

[zapta]

That tiny aluminum case gets a lot of attention. Saleae was right in their decision to use it.

[MattSR]

Saleae give a little more insight into the manufacturing issues and their workarounds in this article here:- http://support.saleae.com/hc/en-us/articles/203233219-Current-Shipping-Status

They seem to be using a combination of in house and contract manufacturing to get through their backlog of orders.

Cheers,
Matt

[Rigby]

Transparency is refreshing and awesome.

[abaxas]

You have to laugh.... they cant make the original product while the chinese cloners can.

WTF

[MattSR]

Not quite - saleae stopped making the original product a year or so ago. The problems they are having are with the gen 2 products which are locked down and haven't been cloned. After the original was cloned umpteen times, they put a lot of effort into securing the new products!!