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How to Reduce the Product Costs of Electronics

Corey Flynn
BlogTips & TricksHow to Reduce the Product Costs of Electronics

Consumer electronics can bear a hefty price tag. Today, the latest Bluetooth earphones from Apple can cost over $549. Meanwhile, smartphones like Samsung Galaxy Note 20 and iPhone 12 can have a market price of $1,200 and $999, respectively. According to an article by Slash Gear, these sky-high prices are primarily derived from the costs of building a product. From the research and development that went into the product and the components themselves to their assembly and the logistics of retail — the costs of creating electronics are numerous and immense.

Given this, what are some ways engineers can reduce the production costs of their electronics? In this article, we cover three strategies.

product cost of consumer electronics

Reduce Direct Material Costs

In most cases, direct material cost constitutes a great portion of the total manufacturing cost of a product. So, it only makes sense for electronics engineers to examine how direct material costs can be lowered to reduce product costs. Fortunately, there are many ways this can be done. Electronic engineers can begin by using off-the-shelf (OTS) components to design their products.

By turning to components that are already mass-produced by big manufacturers and factories, you will be saving yourself some valuable time, effort, and money. It would also be in your best interest to invite quotations from as many suppliers as possible and to consider sourcing internationally from B2B wholesale companies like Alibaba, Global Sources, and Dhgate. Due to low labor costs, the prices of specific components in certain countries are significantly lower.

Streamline Collaboration via Cloud

Another way you can limit costs and increase revenue is by focusing on the biggest asset your organization has: its employees. By investing in the right technologies that support their work, you can increase your employees’ output and shorten the design process.

For instance, investing in platforms that streamline collaboration and optimize the design process would enable engineers to simplify designs repeatedly until they are able to achieve a minimum per/piece cost. Altium 365 is a collaboration platform that lets engineers store their designs into their online database for easy viewing. Through the use of software programs like this, it is less of a hassle for engineers to re-evaluate their designs and use them for future reference. After all, many of the bottlenecks in electronics design stem from back-and-forth reviews and lost data, which a cloud platform like Altium can help solve.

Reduce Product Cost With In-House Simulation

In addition to providing a platform for your engineers to safely keep their designs, you can also cut production costs by bringing processes such as simulation and design validation in-house.

Computer-aided engineering (CAE) software, like SimScale, enables online simulation across all product life cycle phases while reducing IT costs. When Raycore Lights set out to find a cost-effective CAE tool for thermal analysis, cloud-based simulation, which can quickly and easily scale with business needs, was a front-runner. As a cloud solution, SimScale grants access to HPC for product design engineers in a technically and economically feasible way. Computing power is offloaded to the cloud, enabling multiple simulations to be run parallel, shortening the design process from weeks to hours. Forwiz System, use SimScale to improve CPU cooling performance without requiring additional computational resources and physical space

Set up your own cloud-based simulation via the web in minutes by creating an account on the SimScale platform. No installation, special hardware or credit card is required.


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