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What do you think? How much does it cost?

Many people send me a request to design a custom motherboard for their product. And I always try to make it clear from the very beginning. Prepare minimum of $100 000 USD.

I am not saying it will cost this price, but many people are wrong about the cost of PRODUCT development – a way wrong.

There is a big difference between Prototype and Product

Let’s make a very basic math together:

• 30000 EUR for HW design
  Depends on many factors, but you need to calculate with at least 500 hours for Motherboard design. I charge 60EUR/h.
  Calculation: 500h * 60EUR/h = 30000 EUR
• 18000 EUR for 10 boards
  Be realistic. Normally, you may want to build 5 boards in the first batch and then another 5 in the second batch. If you have a good designer and a bit of luck, you can sell some of the first prototypes, but for a big mass production, you always need minimum two spins of the board. To manufacture PCB for one spin costs 3500 EUR, to assemble batch of five boards costs 3000 EUR. You will need to multiply it by two – for two board spins.
  Component price for these boards is high – and if you buy it just for the 10 pieces, it doubles or triples. So, if your board will cost 200 EUR (in mass production), to build a prototype you need to calculate with Component price 500EUR per board. This includes also duty and delivery fees and heavily depends on CPU and chipset – there may be a $100+ difference in price between slowest and fastest CPU.
  Calculation: 2* 3500 (two spins of PCB) + 2*3000(to assemble two batches of boards) + 10*500(for components) = 18000 EUR
• 25000 EUR for BIOS customization
  For your board, you will need your BIOS. If your board is very similar to a reference board, then the BIOS development cost starts at 15000 EUR, but if your board is very different, the cost can easily rise to 35000 EUR or more.
  Calculation: 1x BIOS development for 25000EUR

… and you still have not done any:

• HW verification test (peripheral test, memory test, voltages, waveforms, …)
• Board extensive testing (environmental chamber, long run tests, stability tests, …)
• Certification (EMC, ESD, EMI, …)
• Production test (Production procedure, breakout boards, Test tools, Documentation, … )
• User Documentation (Product brief, Manual, …)