Price of microprocessors

Discussion in 'Off-Topic' started by #12, Sep 13, 2013.

  1. #12

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    I just had to tell another customer that a thermostat for her refrigerator doesn't cost $30 any more. It costs $242.31 (wholesale) (plus shipping). Of course, she asked me why it is so expensive, and I had to tell her, "Because a microprocessor is much cheaper to manufacture than a bi-metal thermostat".

    What's wrong with this picture?
    Am I just having difficulty with waiting until the promised lower costs will materialize? Or did somebody blow smoke up my skirt?

    Seriously...My Ford would just about sell for the cost of the 3 parts this refrigerator needs...a thermostat, a door gasket, and an ice delivery motor. I'm looking at 3 cars in the driveway, every one of them worth at least $20,00 and I'm trying to explain the cost of a microprocessor to the owners of those cars. I guess I need a check-up from the neck-up. (A little salute to nsaspook, there.)
     
  2. Georacer

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    Nov 25, 2009
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    I think it really depends on what you ask:

    An Atmel atmega AVR doesn't cost more than $5 and I bet you can do all the temperature sensing you want with it. But then, when buying a refrigerator replacement, you'd also have to pay for the software engineer's payroll and the exclusive privilege of the company to produce special microcontrollers, instead of a generic bi-metal thermostat.
    The market laws have spoken.

    That said, Moore's Law is still in effect and you can buy a microcontroller sporting an ARM Cortex A9 for a few dozen bucks; This processing power was sitting inside tower cases 7 years ago.
     
  3. #12

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    Well...they will either pay $500 for parts or the market laws will force them to throw it in the trash and buy a new refrigerator. Good to see how microprocessors are improving the world.:mad:
     
  4. MaxHeadRoom

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    Jul 18, 2013
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    It has been common knowledge for years that with appliances and many other items, money is made in the spare parts business.
    I just repaired a stove for a local church that received it as a 'donation', a quick check showed a relay board was the problem.
    The local parts Co, wanted over $200.00.
    $10.00 replacement relay got it going.
    Incidentally the relay, IMO was not rated for the job it was doing.
    Max.
     
  5. MrChips

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    Oct 2, 2009
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    Good idea. When something goes, put it a bigger one!
     
  6. strantor

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    I guess you're paying for art. Canvas only costs a couple bucks and paint isn't much more, but you want a painting, you're going to pay dearly for that.

    I think you're in a good position to save your customers loads of money, while boosting your own profits. Design a general purpose fridge thermostat of your own. You know how all the various brands work; their inputs and outputs. Make a thermostat that is field configurable with jumpers or whatever means, to workwith any brand of fridge, and start selling those instead. Then you don't have to wait for parts either, you can carry them in your truck. Maybe you can sell them online too, if it catches on. You could create your own little niche market. I only ask 5% if your profits for the idea ;).
     
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  7. #12

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    Thanks for the LOL :D

    You MUST know that appliance customers are the most finicky of animals. No way to build a universal control for all the different models, and even if I did, the plastic parts wouldn't look right.:p

    Soo...I eliminated the ice crusher motor by finding the door switch binding on the bad gasket, traced the ice maker to not firing the water solenoid, and both door gaskets need replacing, then add the brain board thermostat for a grand total of $650 plus tax and shipping and labor and...it's going to the dump. That's 4 parts for $650.:mad: I wouldn't even fix it for my own use if they gave me the "dead" refrigerator.

    I used to do this for about $130 in parts. Two gaskets for $90, a thermostat for $30, and a microswitch for the ice maker @ $10.50. Now the parts cost more than twice the highest amount I have ever paid for transmission parts...which makes you think, $300 max for parts and a transmission rebuilder can do 4 a day, so why do rebuilt transmissions start at $2000 and go up from there? I dunno. Seems fair when you consider a root canal and a crown take about 2 hours of labor and cost $2000. I gotta stop doing appliances because nobody will pay $1000 to save a refrigerator, even if it cost $2600 when it was new. (Stainless steel, side-by-side with all the water and ice gizmos through the door)

    In the end, I will replace the handle latch on the dishwasher. That part only costs $31. I wonder why Maytag isn't ransoming it for $170 like the lid switch for a Kenmore clothes washer...

    You never know until you do the diagnosis and look up the parts prices.
     
  8. JoeJester

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    You don't have repeat business if things last forever.

    MTBF has greatly increased over the past few decades, so repair parts aren't plentiful. Supply and demand.
     
  9. strantor

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    Oh come on #12, where's your vision? I'm sure you could make a universal brain board. Maybe not one that works on absolutely ALL models, but most. actually I don't know about residential customers. I assume that if it doesn't work before you arrive, and it does work after you leave, you're a hero. Especially if they can't see the bandaid. But I guess you know them better than I do ;).
     
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  10. #12

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    I don't get FIRST business with 4 parts costing $650!
    And this customer is trashing a 10 year old refrigerator. Meanwhile, the non-computerized refrigerator in my kitchen is pushing 20 years old. It's replacing the non-computerized refrigerator I sold for $99 when it was 30 years old!

    In other words, I disagree.
     
  11. tracecom

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    I traded for a dirt bike that had no spark. I discovered that the resistor plug cap was corroded and mangled inside the rubber, so I bought a new plug cap (one cap, no wire) for $27. At that rate, the bike would cost fifty grand.

    While I was at the dealer, I looked at a really nice 2007 cruiser bike with less than 1k miles; it was tagged $5299, and I thought that seemed like a great deal. On the way out, I saw the owner put a new tag on it: $6299. If a couple more people look at it, it will cost more than a new one. Go figure.
     
  12. Metalmann

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    Dec 8, 2012
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    "What's wrong with this picture?
    Am I just having difficulty with waiting until the promised lower costs will materialize? Or did somebody blow smoke up my skirt?"




    That reminds me of the manufacturing trade manuals in the 60s.....they said that prices would decrease, when all mfg. plants went all computerized, and robotized.


    What a lie to the American public.

    I can't think of one item that got cheaper.

    The {quality} of mfg. goods, went down the cheap path, though.
     
  13. JoeJester

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    Look closer. I can remember when 1 MB ram cost over 100 bucks.

    I paid 3000 for my first computer and printer. It was the CP/M operating system using two 80k 5.25 in floppy drives. My first 30 MB hard drive was over $200.
     
  14. MaxHeadRoom

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    It was assumed that 1Mb was the world! everyone programmed in assembler, so you would never reach that!.
    I never figured out why IBM? (?) came up with the twisted ribbon for floppy drive addressing, when the floppy drive manuf. already had 4 floppy drives addressing in place on a standard interface ribbon.
    Max.
     
  15. JoeJester

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    As a repair person, you won't get the repair. The reason is the manufacturer wants to retain their customer by having them repair or new purchase from them.

    To some, when the cost to repair exceeds 50 percent of the price of new, they start looking for excuses to buy.

    I started my electronics career doing "in home" service calls repairing televisions. When was the last time that occurred? I can tell you for me, it was 40 years ago.
     
  16. JoeJester

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    Bill Gates is attributed as the author of saying something to the effect "all one would ever need is 640k."
     
  17. tracecom

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    Why do manufacturers charge so much for replacement parts? It's simple really: because they can. If if they can, corporate greed dictates that they will.

    The duty of every corporate employee is to make decisions that maximize the wealth of the stakeholders. That was a good rule until the word "stakeholders" was replaced with "shareholders." Corporate responsibility no longer extends to their non-executive employees or their customers. Now, the only thing that matters is the price of the stock.

    As George Carlin (who I despised for his vulgar mouth) used to say, you don't really matter if you're not in the club. He wasn't in the club, and neither am I.
     
  18. JoeJester

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    How much does it cost, to create an something, including all the previous failed ideas, bring it to market, and support it for five years? Anyone have the idea on the labor costs, warehousing costs, marketing, and other miscellaneous costs?
     
  19. strantor

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    I don't know, but I know it can be done without charging as much as they charge. Take auto parts for example; there are 3rd party after market parts companies that spring up all over, capitalizing on the fact that they can make BETTER replacement parts, and sell them for half of what GM or ford does.

    The beauty of the free market. Goes back to my recommendation to #12; if you don't like being price gouged on replacement parts, make your own. And get rich doing it!
     
  20. tracecom

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    I have a very good idea. In fact, it's more than an idea; it's first hand knowledge gained over a period of more than twenty years of being responsible for the profitability of several different product lines in two very different industries. I know very precisely how to calculate P&L down to after tax results, taking into account all product costs, both direct and indirect. I also know that parts sales are the most lucrative of all product sales, precisely because the customer has only two choices: pay the price or do without. In most cases, the markup of repair parts starts at 100% and goes up from there.
     
    Last edited: Sep 13, 2013
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