Quote:
The reason to estimate the price higher in the beginning is because the risk involves in the X3 project. AFAIK, the new price does cut significantly into the profits each unit FiiO will make. Think of it this way - if you are only planning to make 500 units of a device because you are unsure about the market, your relative cost will be higher than said 5000 units, because you initial investment (R&D, etc) is still relatively the same regardless of 500 or 5000 units you made. Then you need to also make sure there is enough profit margin for your dealer, because you are asking them to pickup something you never made before and you have not proof for them on how many they can sell. These are all the little things that eat into your bottom line and you have to make sure that the whole project not only make money, but enough to keep the company afloat. I would think one of the reason why the estimated price seem to come down so fast has a lot to do with the very positive growth FiiO has had last year, and now they can afford to spread the risk onto other products that have been doing quite well and lower the X3 price tag without hurting the bottom line. X3 has been FiiO biggest project so far and I do hope the end result will be very positive and enough to support them to further pursue DAP development.
The reason to estimate the price higher in the beginning is because the risk involves in the X3 project. AFAIK, the new price does cut significantly into the profits each unit FiiO will make. Think of it this way - if you are only planning to make 500 units of a device because you are unsure about the market, your relative cost will be higher than said 5000 units, because you initial investment (R&D, etc) is still relatively the same regardless of 500 or 5000 units you made. Then you need to also make sure there is enough profit margin for your dealer, because you are asking them to pickup something you never made before and you have not proof for them on how many they can sell. These are all the little things that eat into your bottom line and you have to make sure that the whole project not only make money, but enough to keep the company afloat. I would think one of the reason why the estimated price seem to come down so fast has a lot to do with the very positive growth FiiO has had last year, and now they can afford to spread the risk onto other products that have been doing quite well and lower the X3 price tag without hurting the bottom line. X3 has been FiiO biggest project so far and I do hope the end result will be very positive and enough to support them to further pursue DAP development.
