<<"Today's version runs $1,500, but that includes all the microcode needed to build a
professional broadcast encoder system."
OK, I concede it does look like this $1500 is in reference to the initial price of the E4
with full blown professional broadcast microcode. The current VideoRisc broadcast
solution is $3k - $4k.
Guess we'll get more details on Monday.>>
You know Dave, $1500 is a lot for a single chip, even with the microcode. The microcode is almost a give-away, because Cube needs to offer it to sell the chips. So that leaves $1500 for the chip.
There really is no reason for CUBE to sell it for less than $1500 if the only competition is at least $3-4K. I suspect that CUBE's margins on this product will be huge, and that it has plenty of room to lower its price, should it need to meet any competition. But for now, there is no reason to lower its price.
We can get ballpark estimate for the production cost of this chip by comparing it with the Pentium II (same size chip), and accounting for Intl's approximately 50% gross margins. Then bump it up to account for Intel's higher-volume production. Does anyone know the current price of Pentium IIs?
CUBE is in a sweet position because it focused on one market, anticipated the market needs well in advance, and invested in R&D to develop the product and introduce ahead of everyone else. The result -- companies in the high end market will be happy to pay $1500 for a codec solution. And CUBE is happy to collect $1500 for a single chip. And the shareholders . . . |
