I hope the day when decoder manufacturers get down their prices. The hardware value of a sound decoder is under $ 15.-: including research, employees, packaging and so, why to pay more than $40.- ???
Harley-Davidson I hope the day when decoder manufacturers get down their prices. The hardware value of a sound decoder is under $ 15.-: including research, employees, packaging and so, why to pay more than $40.- ???
I am think you live in a different reality than most of us. Cost for software, recording of real sounds, the machines that do the actual parts assembly and testing of the decoder as an example. Development cost are there also as research is always being done to improve the decoders as WE, yes you and I want more and better features.
Many rivet counters want as prototypical as possible. Non rivet counters want low price and then rant when they find out some of the sounds are PC generated or real sounds modified by PC.
You will never see a good sound decoder at the price you fantasize about.
Rich
If you ever fall over in public, pick yourself up and say “sorry it’s been a while since I inhabited a body.” And just walk away.
Not being a mathematical wizard or electronics desighn expert, I figured somethings were missing in your calculations. And I dido what Rich said.
Truck.
It's a case of you get what you pay for.
__________________________________________________________________
Mike Kieran
Port Able Railway
I just do what the majority of the voices in my head vote on.
At some point, the prices will come down, just like they did for non-sound decoders. Competition will drive them down once the manufactuers have recovered their development and start up costs. We're just not at that point yet.
Recovering former former model railroader.
SRN,
I also want add on that the more that are produced, the cheaper that they become. Simple Economics.
I think you're a bit off on the hardware value of a sound decoder. Realtively small quantities of custom chips are NOT cheap, and they all use custom chips for the most part.
--Randy
Modeling the Reading Railroad in the 1950's
Visit my web site at www.readingeastpenn.com for construction updates, DCC Info, and more.
I'd like to see the calculations as well. There's a lot involved other than the chip. The people who do the work expect to get paid and the people owning the company expect a profit. Then the retailer will also expect to earn a profit after paying his employees.
Springfield PA
Hamltnblue I'd like to see the calculations as well.....
I'd like to see the calculations as well.....
I doubt any of us are going to see the calculations unless one decides to prepare a business case for getting money to enter the business. Most places aren't going to give you wholesale prices on components unless you appear to have some credibility as a business buyer. Knowing your cost structure is critical to staying in business for the long term.
I find guessing what it costs a manufacturer to make something a rather fruitless exercise unless I am preparing said business case. Only the federal government gets to see the books on stuff they buy - and even then they pay to have time-consuming independent estimates generated as well. Many of those so-called estimates are hardly worth the paper they are written on. Don't ask how I know this.
Bottom line - either the item is worth what is being charged to you, or it isn't.
my thoughts, your choices
Fred W
If you really think a sound decoder can be made that cheaply, why don't you invest the $10,000 - $15,000 required for a computer-controlled, surface mount technology assembly station, computer, field sound research, etc. and make one for us.
Here's an example of what can be involved in surface mount assembly technology:
http://www.manufacturing4u.com/smi.html
DCC sound decoder manufacturers seem to have found a workable price range between $100 and $140 that apparently covers their overhead and still makes them a profit. Instead of lowering their prices for existing technology, they seem to be taking a page from computer manufacturers who keep prices from falling by adding more features, speed, memory and the like. First came generic sound, then came more prototypical sounds, then came sound file downloads. QSI now offers stereo sound in their top line decoders, although you'd have to install one speaker in the loco and the other in the caboose to be able to hear true stereo separation. I expect that someday we'll see Surround Sound 7.1 offered for Z Scale and still priced between $100 and $140. Digitrax offers a couple of sound decoders with generic sounds and a street price of around $40. I wouldn't expect to see prices any lower so if $40 is your break point, you'd better buy them now.
Hornblower
Let's assume you business model for a moment and follow the price trail.
Decoder manufacturer "X" can produce the sound decoder including all operational overhead for
$15, unlikely, but OK.
"X" is not in the business to break even, but to make a profit, and that profit margin is added to the price that the decoder is sold to the Distributor "Y", and for maths sake, that markup is 66% of the total cost, in this case $10, for a total sale price of $25.
Distributor "Y" also has operational overhead costs that are added to the $25, and to remain profitable, the cost of goods needs to be in the 30% range of the wholesale selling price, but for argument sake "Y" can be profitable with a 50% COG, so "Y" sells the decoder to the dealers for $50 with a MSRP of $100.
Dealer "Z" buys decoder X from Distributor Y for $50, once again the Dealer has business overhead, a family to feed, a sick dog...., and is also in business to hopefully make a profit, and these days it's a little one. Internet only retailers can get by with about a 40 - 50% markup, and discount local shops around 60%, unless they're in a high profile location.
Following this model, the decoder that X made for $15, will cost you, the end consumer $70-75 from INTERNET only retailers, and $80 -100 from the LHS, and to me the value added by the local shop is worth the $5-10 difference, but we.re a LONG way from your under $40 number.
I remember motor only decoders were over $30. Now you can find them for around $15 with more features and lighting. I too would love to see sound decoders for under $100. Some are!. I also remember when a sound decoder was just that. I still have a loco with a sound, motor and lighting decoder inside it. The sound decoder is about the size of the motor not including speaker. I am glad they come all together now and a heck of a lot smaller. My mom used to tell me, Be happy with what you got, Cause you can have nothing.
Pete
I pray every day I break even, Cause I can really use the money!
I started with nothing and still have most of it left!
$30? Motor decoders used to be over $50 and didn't do half what an NCE D13SRJ can do, at $12. Those decoders that used to be $50 are now included 'free' in many Bachmann locos.
Using common parts instead of a custom chip is what allows Digitrax to sell sound decoders for lower cost. However the tradoff is limits int he sound and the extreme complexity of makign your own sound projects. Some of that difficulty is eased by the efforts of Fred Miller with his front end program, but I doubt you will ever get the smaller PIC proocessors like that to do 16 bit sound AND motor control in one - in fact some of the ones that are sound and motor seem to have a few issues playing sound at the same time the loco is moving. Custom chips specifically designed for sound and motor control, like the ones used by Soundtraxx and QSI (take a look at their boards - that big chip on there - that's not some repurposed cell phone part - THAT'S where the cost is) can handle higher quality sound and still have enough CPU horsepower to run the loco.
I waiting to hear the new QSI - the stereo feature will come in quite handy for things liek EMD E units with two prime movers and maybe non-compound articulateds - if it happens to have dual cam inputs you could have each engine of the articulated be completely independent, if it also had dual motors. The stereo channels can also be used for reverb effects without the speakers having to be many feet apart.
Like I mentioned earlier. The more something is produced, the less expensive it becomes. Add in that when newer and updated technologies come about, the prices also come down.
Does anyone remember what the prices for electronic calculators was in the early 1970's? About $100 and without features such as memory and square root buttons.
An XT desktop computer went for $1500 twenty years ago. Now I can get a laptop with 100 times the software and 10 times the processor power for 500$. In fact, the web book that I'm typing this post on cost me $100 brand new from Verizon.
Eek! Price increases with Walthers...price increases with pre-orders...prices about decoders...prices about gas...
Maybe it's time we all got outside and breathed in a little fresh air.
Tom
https://tstage9.wixsite.com/nyc-modeling
Time...It marches on...without ever turning around to see if anyone is even keeping in step.
Mike Kieran Like I mentioned earlier. The more something is produced, the less expensive it becomes. Add in that when newer and updated technologies come about, the prices also come down. Does anyone remember what the prices for electronic calculators was in the early 1970's? About $100 and without features such as memory and square root buttons. An XT desktop computer went for $1500 twenty years ago. Now I can get a laptop with 100 times the software and 10 times the processor power for 500$. In fact, the web book that I'm typing this post on cost me $100 brand new from Verizon.
And despite there being 10's of thousands of model railroaders, the number using DCC, and the number using SOUND, pales in comparison to the number of people using calculators or cell phones. So our stuff costs more. Bottom line.
rrinker Mike Kieran: Like I mentioned earlier. The more something is produced, the less expensive it becomes. Add in that when newer and updated technologies come about, the prices also come down. Does anyone remember what the prices for electronic calculators was in the early 1970's? About $100 and without features such as memory and square root buttons. An XT desktop computer went for $1500 twenty years ago. Now I can get a laptop with 100 times the software and 10 times the processor power for 500$. In fact, the web book that I'm typing this post on cost me $100 brand new from Verizon. And despite there being 10's of thousands of model railroaders, the number using DCC, and the number using SOUND, pales in comparison to the number of people using calculators or cell phones. So our stuff costs more. Bottom line. --Randy
Mike Kieran: Like I mentioned earlier. The more something is produced, the less expensive it becomes. Add in that when newer and updated technologies come about, the prices also come down. Does anyone remember what the prices for electronic calculators was in the early 1970's? About $100 and without features such as memory and square root buttons. An XT desktop computer went for $1500 twenty years ago. Now I can get a laptop with 100 times the software and 10 times the processor power for 500$. In fact, the web book that I'm typing this post on cost me $100 brand new from Verizon.
If 25% of modelers are running DCC Sound, I'll be amazed.
For Mike and anybody: can you compare a laptop ($500) or a web book ($100) with a tiny sound decoder, as an ESU, $ 137.- deco and speaker?????????. That´s for V3.5, wait the price for the new 4.0...And don´t say me that model railroading market is small. Today just 4 or 5 manufacturers sells millions of decoders around the world, specially here in USA, in Europa and Australia, and add the rest of the world, and each day more and more people turn to DCC. Maybe the profit is for intermediaries, who knows,... but I think that the amortization of the decoder is sooner than what you think. Regards H-D.
Dear Randy, 10.000 model railroaders where, in Tombuctu?? not here, indeed. Why do you think that so many model manufacturers sells new models month over month here, in Europe, UK, Japan, etc? just for 10.000 modelers? I think this number shoul´d the floor just to make a new model, not less. Bye.
If I were a betting man, I would bet that the total number of decoders sold since the beginning of DCC by all decoder manufacturers is slightly less than one million. I would bet my life savings on the grand total to date being less than two million. I would also bet the farm that the annual sales of decoders for 2011 would be less than 200,000 (and probably less than 100,000).
But my estimates don't matter to true believers.
Fred W (who has yet to buy one decoder)
I hope you all realize these "$100" net books are not really $100. Buy one without a cellular contract and see you'll see how much they really cost.
Same with smartphones.
I said tens of thousands, not 10,000.
Millions of decoders? Possibly, but not SOUND decoders. No way are sales of soudn decoders in the millions of units. POSSIBLY non-sound, although I kind of doubt that too. but certainly more non-sound then sound. Which is why you can get a motor decoder for $12, or Bachmann essentially throws them in for 'free'.
And comparing price of a German made decoder, in a time of a weak US dollar - perhaps some basic economy lessons would be helpful.
I feel that some answers are exaggerated and disproportionated. Why to involve the Moderator? Has been any abuse or insult?? The topic is out of place? NO: just people in the same hobby thinking differently, just this. This is America, and America means Freedom. If somebody is bothered, or I must leave our hobby because I don´t think same than some fellows,....something is wrong. Bye
True, calculator and computer prices have fallen dramatically but that market includes several million buyers. Model railroad sound decoder manufacturers are fighting for a market that incudes only a few tens of thousands of buyers. There is insufficient volume involved to expect prices to fall as rapidly as has happened with calculators and computers.
fwright If I were a betting man, I would bet that the total number of decoders sold since the beginning of DCC by all decoder manufacturers is slightly less than one million. I would bet my life savings on the grand total to date being less than two million. I would also bet the farm that the annual sales of decoders for 2011 would be less than 200,000 (and probably less than 100,000). But my estimates don't matter to true believers. Fred W (who has yet to buy one decoder)
I think the numbers are higher than your estimates. Basing this statement on the following article written almost ten years ago.
Press Release Rapid DCC Expansion Paces Model RR Industry by Jeff Wilson Digital Command Control set and component business has become one of the fastest growing segments in the model-railroading industry, which otherwise is in somewhat of a holding pattern. Certainly retailer participation in DCC is on the fast track. "The growth in DCC decoder sales has been exponential," says Zana Ireland of Digitrax. "We've seen a dramatic increase in the number of users, both new modelers who are fascinated by the technology as well as the 'old heads' who have decided that DCC is the thing to do." Debbie Ames, director of sales for Lenz Agency of North America, agrees. Lenz reports it sold 190,674 decoders worldwide in 2000 alone and has made and sold more than 1 million since 1988. Ames notes that in earlier years the DCC business was growing at more than 100% a year. She estimates that 14% to 18% of the market now uses decoders and expects that to hit 50% in the next several years. "DCC is one of the lively things in the industry right now," she says. Spurring this growth has been an increase in the number of entry-level systems, as well as the availability of decoders that can simply be plugged into most new model locomotives (especially HO and larger scales). Atlas has even taken that a step further, as the two latest HO locomotives in its Atlas Master series are available only with the firm's dual-mode decoder already built in. This unique decoder allows changing from straight DC operation to DCC by moving a plug in the decoder's socket. Initially there was resistance to DCC from non-DCC modelers who felt they were paying money for a feature they didn't want. However, that notion has changed, says Kate Hannett of Atlas Model Railroad Co. "At first we heard from a small percentage of modelers who felt like they were paying extra, but now the response is overwhelmingly positive," she says. "People are very excited about it. Their thought seems to be, 'Even if I'm not using DCC now, the decoder will be there when I'm ready to switch to DCC in the future.' " Atlas will continue including decoders in its future Master series locomotive releases, Hannett says. Digitrax and Atlas both report that they've seen an increase in the number of hobby shops carrying DCC systems and components, something both are encouraging. "Back in the 'old days' of command control everyone bought from manufacturers directly," Ireland says. "Now, most shops carry DCC products, and most that we deal with carry our full line. It's taken a lot of work to get to that point, but it's been worth it. We've especially noticed that a lot more smaller stores are carrying our DCC products." Ames, too, says Lenz is seeing growth among retailers. She estimates her firm adds one to two dealers each week who want to handle DCC. Ireland and Hannett both say that shops find selling DCC products beneficial because it stirs additional sales. For instance, after customers have bought a DCC system and come back to purchase a locomotive, their next purchase is almost automatically a decoder. "We realize that most shops can't possibly stock all the decoders that we make," Ireland says, "but they stock the most common ones, and the ones that match locomotives that they have in stock." "Our dual-mode decoder has also been very popular," Hannett says. "It's a good middle-of-the-road decoder, and shops and customers have found it to be a good value for its [$29.95] price." Digitrax conducts training classes for dealers at various conventions throughout the year, including the National Model Railroad Association national convention, the International Model & Hobby Expo, and the National Retail Hobby Stores Association convention. "The classes help both old and new dealers, and make them feel more comfortable selling the technology," Ireland says. Items covered include a hands-on demonstration of setting up a system as well as training in answering customers' questions and lessons in teaching customers to choose and use DCC products. Dealers leave the class with a demonstrator set for their shops. The bottom line for DCC manufacturers is to get customers to see the operational benefits of DCC and take the plunge with the technology, even if it means buying a competitor's system. "Our preference is not necessarily for them to buy a Digitrax system, but to buy what they need," Ireland says. "I hate to see someone buy a system that is less than what they'll need in the future." To that end, Digitrax is releasing its new Zephyr starter system, which should be available in the spring. "It's a very basic, easy-to-understand system," Ireland says, "but it is also almost infinitely expandable." The system will compete with the Atlas Master system as well as MRC's newly released Prodigy DCC system. What's next on the DCC horizon? Hannett reports heavy customer interest in stationary decoders, mainly for operating turnouts. "Anything that makes wiring easier," she says. Hannett also noted that Atlas is updating its popular line of track planning books to include wiring information for DCC. Over at Digitrax, the company's high-end users are asking for a signaling system and other products that take advantage of the transponding capabilities of the firm's new high-end decoders (such as the DZ121). Transponding allows command stations to track locations of trains, greatly simplifying train detection. However, the main goal for both manufacturers is to continue attracting new converts to DCC and keeping current DCC users happy. "Our goal for beginners is to provide an easy-to-understand system, but one that's expandable," Ireland says. "And for high-end users, it's to keep giving them another level to go to."
Press Release
Rapid DCC Expansion Paces Model RR Industry by Jeff Wilson
Digital Command Control set and component business has become one of the fastest growing segments in the model-railroading industry, which otherwise is in somewhat of a holding pattern. Certainly retailer participation in DCC is on the fast track.
"The growth in DCC decoder sales has been exponential," says Zana Ireland of Digitrax. "We've seen a dramatic increase in the number of users, both new modelers who are fascinated by the technology as well as the 'old heads' who have decided that DCC is the thing to do."
Debbie Ames, director of sales for Lenz Agency of North America, agrees. Lenz reports it sold 190,674 decoders worldwide in 2000 alone and has made and sold more than 1 million since 1988. Ames notes that in earlier years the DCC business was growing at more than 100% a year. She estimates that 14% to 18% of the market now uses decoders and expects that to hit 50% in the next several years.
"DCC is one of the lively things in the industry right now," she says. Spurring this growth has been an increase in the number of entry-level systems, as well as the availability of decoders that can simply be plugged into most new model locomotives (especially HO and larger scales).
Atlas has even taken that a step further, as the two latest HO locomotives in its Atlas Master series are available only with the firm's dual-mode decoder already built in. This unique decoder allows changing from straight DC operation to DCC by moving a plug in the decoder's socket.
Initially there was resistance to DCC from non-DCC modelers who felt they were paying money for a feature they didn't want. However, that notion has changed, says Kate Hannett of Atlas Model Railroad Co.
"At first we heard from a small percentage of modelers who felt like they were paying extra, but now the response is overwhelmingly positive," she says. "People are very excited about it. Their thought seems to be, 'Even if I'm not using DCC now, the decoder will be there when I'm ready to switch to DCC in the future.' "
Atlas will continue including decoders in its future Master series locomotive releases, Hannett says. Digitrax and Atlas both report that they've seen an increase in the number of hobby shops carrying DCC systems and components, something both are encouraging.
"Back in the 'old days' of command control everyone bought from manufacturers directly," Ireland says. "Now, most shops carry DCC products, and most that we deal with carry our full line. It's taken a lot of work to get to that point, but it's been worth it. We've especially noticed that a lot more smaller stores are carrying our DCC products."
Ames, too, says Lenz is seeing growth among retailers. She estimates her firm adds one to two dealers each week who want to handle DCC.
Ireland and Hannett both say that shops find selling DCC products beneficial because it stirs additional sales. For instance, after customers have bought a DCC system and come back to purchase a locomotive, their next purchase is almost automatically a decoder.
"We realize that most shops can't possibly stock all the decoders that we make," Ireland says, "but they stock the most common ones, and the ones that match locomotives that they have in stock."
"Our dual-mode decoder has also been very popular," Hannett says. "It's a good middle-of-the-road decoder, and shops and customers have found it to be a good value for its [$29.95] price."
Digitrax conducts training classes for dealers at various conventions throughout the year, including the National Model Railroad Association national convention, the International Model & Hobby Expo, and the National Retail Hobby Stores Association convention.
"The classes help both old and new dealers, and make them feel more comfortable selling the technology," Ireland says. Items covered include a hands-on demonstration of setting up a system as well as training in answering customers' questions and lessons in teaching customers to choose and use DCC products. Dealers leave the class with a demonstrator set for their shops.
The bottom line for DCC manufacturers is to get customers to see the operational benefits of DCC and take the plunge with the technology, even if it means buying a competitor's system.
"Our preference is not necessarily for them to buy a Digitrax system, but to buy what they need," Ireland says. "I hate to see someone buy a system that is less than what they'll need in the future."
To that end, Digitrax is releasing its new Zephyr starter system, which should be available in the spring. "It's a very basic, easy-to-understand system," Ireland says, "but it is also almost infinitely expandable." The system will compete with the Atlas Master system as well as MRC's newly released Prodigy DCC system.
What's next on the DCC horizon? Hannett reports heavy customer interest in stationary decoders, mainly for operating turnouts. "Anything that makes wiring easier," she says. Hannett also noted that Atlas is updating its popular line of track planning books to include wiring information for DCC.
Over at Digitrax, the company's high-end users are asking for a signaling system and other products that take advantage of the transponding capabilities of the firm's new high-end decoders (such as the DZ121). Transponding allows command stations to track locations of trains, greatly simplifying train detection.
However, the main goal for both manufacturers is to continue attracting new converts to DCC and keeping current DCC users happy. "Our goal for beginners is to provide an easy-to-understand system, but one that's expandable," Ireland says. "And for high-end users, it's to keep giving them another level to go to."
Martin Myers
mfm37 I think the numbers are higher than your estimates. Basing this statement on the following article written almost ten years ago. Press Release Rapid DCC Expansion Paces Model RR Industry by Jeff Wilson Debbie Ames, director of sales for Lenz Agency of North America, agrees. Lenz reports it sold 190,674 decoders worldwide in 2000 alone and has made and sold more than 1 million since 1988. Ames notes that in earlier years the DCC business was growing at more than 100% a year. She estimates that 14% to 18% of the market now uses decoders and expects that to hit 50% in the next several years. Martin Myers
Press Release Rapid DCC Expansion Paces Model RR Industry by Jeff Wilson Debbie Ames, director of sales for Lenz Agency of North America, agrees. Lenz reports it sold 190,674 decoders worldwide in 2000 alone and has made and sold more than 1 million since 1988. Ames notes that in earlier years the DCC business was growing at more than 100% a year. She estimates that 14% to 18% of the market now uses decoders and expects that to hit 50% in the next several years.
Good thing I'm not a betting man - I would have lost the farm.
I think the growth projections were a little optimistic - the 50% penetration point of locomotive sales was probably finally reached a year or two ago. When I prepared my estimate, I forgot about all the cheapie Lenz decoders going into Bachmann locomotives.
There is a difference between a locomotive equipped with a dual mode decoder, and a decoder-equipped locomotive on a DCC layout. But I did say decoders sold - which would include all sales from the decoder manufacturers, and not at retail points - and I was wrong. Probably by an order of magnitude.
I have been following this thread for a while - Having managed a train department in a hooby shop I have a few thoughts:
First, using the long established industry standard markups, IF, and do say if, the hard cost to produce is $15 than the MSRP is easily $100.00. Then, sold direct to a retailer rather than through a distributor, a discounted street price of $75.00 would be realistic - we are not far from that now, leading me to beleive the cost to produce is still higher than that in the relatively small quantities of this industry.
There might well be 5-7 million decoders of all types already in circulation out there, but broken down by type, and brand, that's not very many as modern electronics manufacturing goes.
It is still my belief that DCC has captured almost all of the existing modelers it will capture and that useage is about 50% among HO and N scale modelers. Much less among the larger scales, maybe as low as 15-20%.
I do believe DCC will capture most of those who enter the hobby from here on out - easily 80% or more. But that "conversion" by atrition will take quite some time.
I'll wing a guess, I think there are likely about 50,000 modelers who use DCC. If they each have 50 DCC equiped locos - factory or aftermarket - that's at least 2.5 million, plus what is "on the shelves" for sale.
I don't use DCC on my home layout, but I am invloved with the layouts of a number of modelers who do, they all have more than 50 locos with DCC at this point.
As for sound decoders and their cost - well $15 would be too much for me since the sound quality of any HO scale onboard sound system is not good enough to make me want sound in my locos.
But like all this price discussions, you either want it or you don't, you either can or aford it or you can't.
Nobody "owes" it to you any cheaper than what they want to sell it for.
Sheldon