Estimate manufacturing cost of 211 & 622

[Tom Bombadil]

So what you do think it costs Dish to build a 211 or 622?

A few years ago a HD receiver routinely sold for $799 or more. Since then the chips have come way down in price. For example, adding a HD tuner card to a PC can be done for around $70. And TV manufacturers are adding almost no additional cost to a new HDTV set when adding the integrated HD tuner.

So that tells me that the cost for the HD circuitry is pretty low. Likewise stuff like HDMI ports, remotes, and ethernet ports is pretty low.

Cabinets and power supplies are cheap, witness that VCRs and DVD players can be had for $29.

I'm sure it did cost something to build in the MPEG4 decoding, especially in the first run and given that it is using the 2-chip decoder.

I look at this and think that the 211 could probably be sold for a tidy profit at $249. And the 622 for around $499. Perhaps even a bit lower.

Heck, one can buy a PC w/17" monitor for as low as $299 from Dell.

The list price on an 80 hour Series 2 Tivo box is $219 and they are offering a $150 rebate to bring the net cost down to $69. You can purchase one for $69 with no service commitment.

So I see the prices that E* has attached to the 211 & 622 as being a bit on the high side, particularly given that they know they will be installing millions of these over time. This isn't like introducing a product that you don't know will sell. Dish is going to force these receivers into a lot of homes.

My thoughts are that Dish does not want to aggressively price their receivers because they would rather you lease them than purchase them. I doubt Dish is losing much on a 622 being leased at an upfront charge of $299, that may come close to covering their cost. Then they will collect all of the leasing fees and still retain ownership of the box.

It would be difficult for them to lease a 622 for an upfront charge of $299 if the list price was only $499. So they pump up the list price in order to encourage leases. After all, there is no competition in town for a Dish compatible receiver.

 

[Musky boy]

You asked what I think......Here it is.

As you stated, VCR's and DVD players can be had for well below $50.00. These components have integrated circuit boards that control how they function, a power supply, and some type of software that makes them function. Every VCR and DVD player has different ways of functioning and different interfaces to make them function thus they all have progams that are written specifically for them. They all are in different enclosures and yet they can be had for under $50.00.

Now take Sat boxes. They have integrated circuit boards, a power supply, software and an enclosure. Material wise, they do not cost any more to produce than any other electronic devices, granted the 622 has a hard drive, but that cost much less for dish to buy than if I were to buy it, even at retail prices, they are very inexpensive. The ones Dish uses in the 622's are probable less than $30 wholesale in bulk.

What really scuffs my rug is that the VCR and DVD player manufacturers are making a profit selling their wares for under $50.00 and they do not get any monthly installments for programming. Dish on the other hand tries to make you believe that they are making you a great deal with the $299 622 and a $49 upgrade fee for the 211.

I have been a Dish customer for about8 years now. I paid $200 for my dish 300 system and installed myself. A couple of years later when dish moved the ppv programming off to a different satellite, I had to upgrade to a dish 500. I had to spend several hours on the phone to finally get the same deal as a new subscriber which was $100 for a new dish, 2 - 301 receivers and profesional install. A couple of years later I upgraded to a Super dish, $49.00 for new dish DP 34 switch and install. For the first 6 years I averaged $40.00 per month progamming. The last 2 yeas I average $48.00 per month programming. I am now going to upgrade to HD Silver w/ 2 recievers...$49.00 install and $70.00 per month programming.

To date dish has received about $4430 from me and starting soon, will receive an additional $840 per year.

To try to answer your original question about what does it cost to produce a 211 or 622, I do not know for sure, but whatever it is, I am sure that I have more than paid for all of the components that dish has given to me at "a very resonable price" and might have even put a little money into Charlies pocket. I would just like to see exhisting customers get as good of a deal as new customers. The deals that they give to new customers now is usually free equip and install and they get their money back and then some in programming. Why must I put more money in Charlies pocket than a new customer???? The few Billion that he is worth is not enough????

Sorry for the soap box,

John

 

[dodge]

Cost of manufacturing a Set top box

Volume also determines how much a product costs. In a production run of lets say a dvd player it may be like 10-20 million units for just let say the us market. That same dvd player made be made in another 10-20 million quantity with a 200 volt power supply instead of 110 vac supply for let say south east asia. Thus with such a high volume of product the cost is way down. And most dvd players are made where??? You guessed it , in China where labor is like $0.19 and hour including benefits ( none)....


The cost's can also be looked at this way, how many subs does e have, let say 15 million. How many will get a 211 or 622 in the next let say 2 years, maybe a million???
Really not a lot of product in a production run..

The 411's and 211's are made in Mexico. Labor is cheap, but not that cheap $ 1-$3 an hour us. There is also a lot of cost in engineering a new product. The cost to make that 211 or 411 is probably 40 bucks us. Not included in that cost is shipping unit to El paso warehouse storage and packaging the unit in El paso as well.

The profit margin on the 211 is probably a lot less that what it is for the dvd player.

 

[Musky boy]

I agree that volume of sales plays a big role, but not sure if I agree with your numbers in general.

When I drive around my neighborhood, I see that about 10% - 15% of the homes have dishnetwork systems. I will assume that all of the houses in my neighborhood have atleast 2 dvd players. So I would agree that there are more dvd players than there are sat receivers but..........I would guess that in my neighborhood that there are hundreds of dish 301 receivers and yet I would be surprized if there were more than just a few dvd players that are the same manufacturer and model as mine. (ie. I believe that the production runs for the various dvd players and vcrs is smaller than the various sat receivers because there is simply not as much of a selection available for satellite receivers.)

Not wanting to start a debate......but I think the equipment should be free if they are going to require a commitment. My cell phone was free!!!!!

John

 

[Mike500]

The patent licensing fees are probably a sizeable costs of each receiver.

 

[Tom Bombadil]

With Dish 311 receivers selling for $99 new, it is hard to imagine why the price for a 211 is $399. The HD tuner circuitry, at the systemboard level, probably only costs about $15-$25. Then there are the MPEG4 decoding chips. The manufacturing costs would be about the same.

Of course the 811 was listed at $399 too. I think they were making a lot of profit at that price.

And it is typical that equipment that enables consumption, such as Polaroid cameras, cell phones, Tivos, ink jet printers, etc., that the hardware prices are almost always subsidized, or held to low markups, in order to make the money off of the subscriptions / usage.

In the case of Dish receivers, that doesn't seem to be as true, excepting for new customer deals.

 

[tee]

Anyone know who/where is making the 622's? I know Dish used Samina-SCI for (recently) everything prior to the 211/622. Not sure if Samina-SCI is still doing it. They are in my backyard and I still have yet find one that has fallen off the back of a truck.

 

[bizzyvtb]

musky boy, your cell phone may have been free with commitment but i can gaurantee you that not all cell phones are free with commitment, for example try to go to cingular and get the new treo for free

 

[Musky boy]

Bizzyvtb,

I can not argue with you on that, but, I have done several upgrades with CINGULAR. Every time my contract is up, I go to them and get a new contract and up to as many as 5 cell phones for free. I have never upgraded or re-instateded a contract with Dish for FREE. No matter what the upgrade charge is, I am sure that the contract is designed to make up the expense of the equipment. Just would be nice to get a better deal than a new customer. Loyalty means nothing in todays market.

John

 

[dodge]

Dish 211

Anyone know who/where is making the 622's? I know Dish used Samina-SCI for (recently) everything prior to the 211/622. Not sure if Samina-SCI is still doing it. They are in my backyard and I still have yet find one that has fallen off the back of a truck.

Not if your backyard is mexico!!!
The 211 and 411's are all made in mexico!!!

 

[ehalleen]

Certain cell phones are free. Same with dishnetwork and certain recievers. But if you want the lastest technology in cell phones and cell service youare going to pay for it.

 

[mike123abc]

Dish DVR is probably closer to a PC than a DVD player. I would suspect that they project the cost of the unit to drop to 300-350 range very soon. This is probably where the $299 lease price comes from. By you paying the $299 it lowers Dish's cost down to probably what a 311 costs them. Right now I suspect that it costs Dish closer to $500 for the 622 in the first couple of manufacturing runs, since they are probably making in small quantities (i.e. 250-1000) at a time to be sure they work before they ramp up to something like 40-60k/month with probably plans to even go higher eventually.

The early adopters (me included) probably will pay $700 now only to see the price drop down to $500 then $300 and watch the lease up front payment fall to $100 or even free for new customers.