Topic: How much does it cost Butterfly Labs (BFL) to build a Jallapeno? (Read 1677 times)

Don't forget the cost of shipping *sarcasm*

I would go way deeper.

The most expensive parts would be the chips. Somewhere around $10 for one, I would guess. The casings will be below $5. The PCB, heatpipe and so on might come with another $10-15 as a fixed cost. Now you can add dev and production costs to that, which cannot be calculated at the moment.

Anyone directly selling a product with less then 100% markup is a full scale failure as entrepreneur, if you do not plan on ridiculously large amounts of sales. A safe margin is around minimum 150-200% including value added tax losses. This might sound like a lot, but once variable costs are factored in, taxes are factored in, you will see what margins are left.

In my projects, we had goods we bought, repackaged and sold at around 300-400% margins, which barely allowed people to eat and live.

i would guess $75 - $100. more than that and they have no business being in business. Their development costs need to be figured in as well as production costs. hmmm $75 might even be high, maybe more like $50-$60.

I would be very interested in seeing a detailed estimate.

Surely less than $274, maybe $100? $150? $200?

I could go on about BFL for days. Lets just say I am a skeptic. Not they they don't have a product, they have one. But I don't think they can make much of a profit per unit is the problem. I wanted to address this today. I don't want this topic derailed with everything B.S.L so lets keep this thread about just this one topic only. The costs involved with building each jallapeno. Thx in adavnce.  

There was a video made on youtube this week where they take apart a Jallapeno down to the PCB: http://www.youtube.com/watch?v=ciwfCqP8AiU

What would a smaller company like BFL be charged per item:
* 65nm Chips (x2 per jallapeno)
* PCB Fully Assembled (just the way you see it in the video)
* Custom heatsink
* Fan
* Metal Case (Including all screws/hardware)
* PSU (with cords and wiring)
* Employee costs per unit to hand build, test, and pack (1/2Hr wage?)
* Over the top designer packing/boxing
And your total estimated cost for parts per unit

Next:
* Monthly R&D costs for new cutting edge 65nm asic tech, case design, ect.
* Monthly costs of failed wafers, PCB boards, case designs, PSU design ect.
* Monthly overhead costs for the buildings/utilitys
* Mothly employee costs
* Monthly shipping costs for large expensive parts shipments from overseas
Your total estimated cost per month

The last thing I want to know is how hard is it to get good high yeilding wafers of a newly designed 65nm chip and PCB board. This seems to be BFLs problem. How much more will each 65nm chip cost to produce if they keep getting bad batches and can only cherry pick a few worthy chips per wafer?

The main reason I ask this is obvious. There is a simple equation we can plug the above numbers into to find out how many units BFL would have to ship per month to make a profit on Jallapenos alone, if it is possible. Lets keep this one thread mostly about the numbers above if we can. I know they will make money mining during the test period. I know they will make money back on shipping charges. The responses to my questions above will be long enough already without digression into other details.