In product development, particularly developing business products there are many variables to consider if you are going to build a successful product. From product features, maintenance, longevity, and purpose. A quick Google will bring up pages of product design advice that mostly all boil down to 4 key elements of product design
Functionality is another key element of product design. This involves making sure that your product works as intended and meets customer needs and expectations.
Aesthetics is the ability of the product to meet the qualitative value of a product. Does the product deliver value over and above the utility of the product itself? Motor vehicles are a great example of value enhancement.
Quality is another essential element of product design. This involves making sure that the components used in the construction of the product are reliable and durable enough to last for a long time without any issues or problems arising from them.
Usability is the quality of engagement and use. From purchasing to delivery to documentation to support. Otherwise, known as experience, the use of the product.
There is however the most important factor and that is price or more correctly cost. Basically, can we deliver the above value at a cost that is acceptable to the customer at a cost that is acceptable to us? This is what we spend a lot of time thinking about. And within this are two major cost components of developing a product. The first is licensing costs and the second is logistics.
For example, not many people outside of the electronics industry understand how much licensing fees affect the cost of a product. The license fee for a SOC chip can be multiple hundreds of dollars. There is no way to deliver a high-end phone to the market when the core chipset is $150 in licensing fees. Almost everything we do has a SOC processor on board. From the AllWinner RISC processor to ST Electronics ESP32, the RP2040, to the Intel x64 range of CPUs, which when flows through the distribution channels turns into multiple hundreds of dollars in licensing fees. When we choose a SOC chip, the cost plays a big part in the decision.
Secondly, logistics costs play a significant role. Every component in our systems has logistics costs. We you first develop a product the cost of prototyping will be significantly more expensive than the finished product largely because we source individual components to test and verify. However, even during the prototyping process, it is necessary to be cognisant of how logistic costs will play into. A fun fact, logistics costs inside China are dramatically lower than in most parts of the world. Moving components inside China is cheap and easy to do. Moving across borders is something entirely different.
So being close to resources is really important. The closer you are to the raw materials, the faster and cheaper it is to test out new ideas and mass produce them. If
Let me tell you about Huachangbei in Shenzhen.
In 1979, the government moved the North Guangdong Arsenal to Shenzhen. They named the new factory “Huaqiang”, which means “strong China”. The road next to it was called “Huaqiang Road”, and that’s where the name “Huachangbei” comes from – it means the northern part near Huaqiang Road.
A few years later, the head of SEG Group, Fuyuan Ma, decided to open up an electronics market in Shenzhen similar to Akihabara in Japan. In 1988, he set up the SEG Electronics Market inside the SEG Industrial Development Building.
Across the street, the Huaqiang factory moved elsewhere as Huachangbei started to become the business center of the city. The old Huaqiang factory buildings were turned into an electronics market covering 60,000 square meters.
Shortly after, they tore down the SEG Industrial Development Building and put up the SEG Plaza in its place – a huge skyscraper over 70 stories tall with business space of over 160,000 square meters.
In the following years, led by SEG and Huaqiang, dozens of other markets opened up and the electronics industry really took off in Huachangbei.
This concentration of component suppliers for the production of electronic circuits, fabrication, packaging is of enormous benefit in two major ways. Firstly we can quickly access components that we need to fabricate a prototype there by dramatically improving prototyping time, reducing time to market.
But secondly and more importantly, the comprehensive range of components and solutions offer the ability to look for solutions to problems. The most challenging and time consuming effort is solving individual problems within an offering that we want to build.
This is why we choose the Greater Bay Area.