RPi use cases explained

Jonathan Garrish wrote:

 

but now they've started carving things up those numbers won't be quite so meaningful on their own...

Some kind of lower and upper bounds on profit can  be quantified.  As I wrote back in #14 on this thread,

If the main aim were charitable support of education, the price of Pi would have dropped by now anyway.  Their BOM cost now is just a fraction of what it was in the days of 10k-30k volume costing, so if they wished to lower the barrier further, I bet they could, and very easily.   (Farnell and RS are likely to be making nice profits on accessories anyway.)

At 30k volumes, we know the BOM cost was below $35.  What's the typical level of bulk discount on the main components of a board like the Pi, say for 100k, 200k, 500k, 1m units?  Knowing typical figures for volume component discounts allows us to estimate the ballpark profits from sales of well over a million boards.

I think the division of profits has changed since the original "licensed manufacturing"

agreement that apparently had E14/RS taking the manufacturing risks and presumably

most of the profits, and reportedly leaving RPF with just a nominal amount for each unit.

The new agreement, apparently signed in January 2013, apparently has RPF doing the

manufacturing, explaining the delay in Model A shipments until Feb 2013, and presumably

has RPF keeping a correspondingly larger share of the profits, and permitting Egoman to

manufacture for the China market, and shifting E14's emphasis to accessories.

The financial public reporting requirements for UK charities are pretty extensive, especially for

amounts over £10,000,

We have seen

The latest Annual Accounts submitted to Companies House for the year up to 31/12/2011 reported 'cash at bank' of £47,963, 'liabilities' worth £120,044, 'net worth' of £4,243 and 'assets' worth £124,287.      Raspberry Pi Foundation's risk score was amended on 03/07/2013.

http://companycheck.co.uk/company/06758215

and

http://opencharities.org/charities/1129409

(consistent with an aborted attempt in 2009 to build a non-linux Python device

based on the arm-less BCM2727, followed by Eben's MBA up to mid 2011)

but I don't think we can expect to see similar detail on the for-profit subsidiary.

Liz has mentioned early on about how the laws prevent charity trustees from

benefiting financially from the charity, but I don't suppose those rules apply to

for-profit subsidiaries of charities.

Do you have any feeling for how the new agreement signed in January 2013 might correlate with the time when other retailers like Maplin and Adafruit started offering Pi boards?  I'm wondering if there was an exclusive deal for Premier Farnell and RS originally, and then that exclusivity was negotiated away to allow RPF to appoint further retailers to their heart's content.

It's an elusive area, since it seems we don't yet know from where those other retailers source their boards.  Very little transparency for what is portrayed as an educational project.

Maplin was elling the RPI and a limited number of peripherals around then but I think the number and volume started to rise about then but also they took on moreArduino stuff so that may of been more of a attitude change on Maplins part then any great RPI only scheme

Interesting.  If Maplin/Adafruit sales of Pi preceded the new agreement, then it suggests the following possibilities:

• There never was an exclusivity agreement for Premier Farnell and RS, so RPF extended the partnership.
• OR, there was exclusivity in distribution but not in retail, and Maplin/Adafruit were bound by RPF to retail only.
• OR, there was exclusivity but Farnell and/or RS had the right to broker new distribution deals, and did.

That's not a full set, there are other possibilities, but these seem the most likely.

It does seem to me though that Premier Farnell and RS have had no manufacturing involvement at all beyond offering their contacts in the far east, but just bulk ordered from RPF.  It was their cash that opened the door to volume.  It has felt like just distribution all along.

coder27 wrote:

 

A 30 April 2013 news report explained:

Eben Upton, executive director of the Raspberry Pi Foundation said: “On the basis of guidance received from our professional advisers, we've separated the existing trading activities of the Foundation into a wholly-owned trading subsidiary, Raspberry Pi (Trading) Ltd, while the Foundation continues to pursue its original educational mission. This is apparently considered best practice for charities which conduct significant commercial activity – charity shops would be a good example.”

For some reason, this reminds me of the scene in Gilbert and Sullivan's Patience AKA Bunthorne's Bride, in which "fleshy poet" Reginald Bunthorne, spurned by Patience, has decided -- by the advice of his solicitor -- to raffle himself off in marriage to one of the chorus of Rapturous Maidens:

Bunthorne:

Heart-broken at my Patience's barbarity,

By the advice of my solicitor

In aid -- in aid of a deserving charity,

I've put myself up to be raffled for!

 

[He introduces his solicitor.]

 

Maidens:

By the advice of his solicitor,

He's put himself up to be raffled for!

You know, when I first heard of Eben and Liz banning RasPi forum users while listening to classical music, I immediately though of Wagner's "Ride of the Valkyries".  Now I'm wondering if they were actually listening to Gilbert and Sullivan's The Mikado in which Lord High Executioner Ko-Ko sings "I've got a little list":

Ko-Ko:

As some day it may happen that a victim must be found,

I've got a little list -- I've got a little list

Of society offenders who might well be underground,

And who never would be missed -- who never would be missed!

...

They'd none of 'em be missed -- they'd none of 'em be missed!

 

Chorus of fanbois:

He's got 'em on the list -- he's got 'em on the list;

And they'll none of 'em be missed -- they'll none of 'em be missed.

Yes, I think the topsy-turvydom of Gilbert and Sullivan does seem appropriate here.

John Beetem wrote:

 

You know, when I first heard of Eben and Liz banning RasPi forum users while listening to classical music, I immediately though of Wagner's "Ride of the Valkyries".

I immediately thought of Clockwork Orange.  The sadistic pleasure that shines through in even mentioning the music that was playing while banning people is disturbing, and a cautionary red flag for anyone in that sphere of influence.

decided -- by the advice of his solicitor

I only regret that I have but one like to give. 

  -- famous last words (paraphrased)

I see that the page footer at

http://www.raspberrypi.com/merchandise/

http://www.raspberrypi.com/mpeg-2-license-key/

shows

   Raspberry Pi (Trading) Ltd.

   VAT Registration Number: 155696471

E14's 2013 contract with RPF has some interesting details:

http://www.element14.com/community/docs/DOC-51657/l/element14-agrees-new-global-distribution-deal-for-raspberry-pi

First of all, it's described as a "distribution" deal, rather than a manufacturing deal.

element14 has announced it has signed a new distribution contract with the Raspberry Pi Foundation to sell the  credit-card sized computer around the world.

In contrast, there are clear references to prior E14 manufacturing:

Half a million Raspberry Pi’s have now rolled off the element14 production line

element14 brought production of the Raspberry Pi to the UK from China in September 2012.

Mike Buffham, Global Head of EDE at element14, said: “... Now less than a year on and we have manufactured over 500,000 at element14 alone,

and going forward:

"and we are delighted to have signed a new global contract with the Raspberry Pi Foundation to continue to play a pivotal role in putting computer programming back at the heart of engineers, both young and old.”

"continue to play a pivotal role" might sound like it means just more of the same,

but apparently it means "continue to play a pivotal role, but of a different sort".

It's dated 8 January 2013, one day after Eben reportedly became a director at

Raspberry Pi (Trading) Ltd.

It's said to be signed with RPF, but if Eben signed it, it probably would have been

signed with RP(Trading).

Eben is described as: "Co-Founder of the Raspberry Pi Foundation", rather than

as a current trustee or officer.