The Manufacturing Cost Of Raspberry Pi

Question

I am curious to know how much raspberry pi cost to manufacture (not the cost to us) at the volume it is being manufactured now? I mostly want to know who how much margin is left in the larger production of a cheap computer like the pi?

Answer 1

This bill of materials has not officially been released, so any real answer to this question would be speculation.

You could derive an approximation of the cost by looking at each individual component, but you would also have to add manufacturing and labour, which is unknown. Also the economies of scale involved would be difficult to determine.

It's worth noting that the design and initial prototype work was all donated, so that never added to the cost of the final product.

Also, here is a quote from the foundation forum which claims that the manufacturing cost is definitely less than the sale price:

As has been said on many occasions the cost to build the Raspberry Pi is not subsidised by anyone, the cost to make the board is $25 - X & $35 - X where X is some value that only members of the foundation (& the two manufacturers) know the actual number.

- ukscone

That's about the best I can do. I hope that helps you.

Answer 2

It is difficult to calculate the manufacturing cost of a product like the Raspberry Pi. So much depends on where it is manufactured, what discounts can be negotiated on components for the volumes being produced, how complex the design is, how well it had been designed for ease of manufacturing, how much the tooling costs and over how many units the tooling can be amortised over.

My suspicion is that the price was set based on the minimum volume the Foundation expected, with the aim that any savings from increased volumes could be ploughed back into the Foundation for future investment.

With the recent move of manufacturing to Wales however, we can at least add a few more numbers to the estimation though.

From Made in the UK! we can see:

The initial contract will see the Pencoed plant producing 30,000 Raspberry Pis a month, and creating around 30 new jobs.

So we know that each Raspberry Pi taking around 10 minutes of labour on average, so at least £1 per device goes on workers wages, probably more (assuming not all of those 30 workers are on minimum wage).