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Chalk this up to another jaw dropping moment for Smith.
In a newly minted blog post by iLocus on DECT Vs. WiFi (which is a great read), there is interesting nugget of information:
A DECT phone is cheaper to build than a WiFi phone.
Why Are DECT Phones So Expensive?
According to iLocus, the current bill of materials for a DECT phone is $10, while the build costs for a WiFi phone is between $20 - $30. This means it is 66% cheaper to build a DECT phone versus a WiFi phone. The funny thing is, DECT ip phones, for the most part, cost two to three times as much as a WiFi phone.
Now this wouldn’t really mean much if it wasn’t for the fact that you can pick a WiFi phone up for $100 while DECT phones, like the ones from Polycom and Snom, start well over $200 each. Yes, there are costs for software, R&D and marketing, but why are DECT phones so much more expensive? Are IP DECT solutions more expensive then non-IP based DECT solutions?
If you know why this is, please spill the beans.
{ 8 comments… read them below or add one }
Because better solutions costs more? Price isn’t production induced, but induced by the customer will to pay, unless rare cases of perfect concurrence.
Pun apart, the SNOM M3 is 80€ per Handset, and the base 55€ more, enough for 3 communications, so the total price for a single set is 100€ . I bought and use 30€ Siemens handsets on a 30€ C470IP base, good for 2 SIP Calls - plus a PSTN Call, which could use an ATA adapter.
(not counting you can register more handsets, but the limit I use is the number of simultaneous calls.)
My Nokia E61i is boiling hot after 10mn of wifi conversation. DECT is more adapted.
@ Marc:
True, better solutions do cost more (and DECT is a better solution when compared to WiFi) however, the number one factor limiting DECT growth in the home and SMB space (in terms of VoIP) is price.
Considering it is cheaper to produce, it would seem that manufacturers have the room to lower prices, therefore making it more affordable. I am not saying race to the bottom, but getting handsets in the sub $150 arena would go a long way to speed up adoption.
Non-IP based DECT systems are available from a variety of the traditional vendors. A little trip to you major electronics retails will confirm this. At Fry’s in Houston DECT 6.0 systems have over the past year pushed aside all the legacy 2.4/5.8 GHz phones. They’re prices about where you’d expect, in the $60-200 range depending upon number of handsets and features.
SIP/DECT systems like the snom m3 cost more. Although the Siemens Gigaset range really don’t, but they’re not available in the US.
When buying the DECT system you are also buying the base radio with the first handset, as opposed to Wifi where the AP is sold separately.
IMHO, SIP over WIFI was a complete non-starter until WMM was available in N type APs. Then 802.11r fast handoff between APs is just now being ratified. Power management is an issue.
Wifi is less than idea for voice. It’s only compelling if you really must have a converged wireless infrastructure.
@mgraves:
What I still don’t get is why SIP DECT phones are so much more expensive. We sell single handsets in the $300 - $500 range.
because it’s a recent market, not mature enough? the early adopters’ curse
Consider also the bigger question of why SIP hard phones are so expensive? Because the market will bear it, and everyone wants the fastest ROI.
A starter snom m3 system ought to sell for around $90. Panasonic sells all kinds of DECT systems for $50-120. Uniden, GE, Sony & others as well. Of course they bank on large sales volume. That something that snom probably thinks twice about.
All SIP hard phones are too expensive when you consider the street price of something like the Asus Eee PC. We’re basically talking about the same sort of components, but the IP telephony hardware always costs more.
Except when it doesn’t. And then you have the Grandstream BT series, which I simple refuse to use.
What’s required is a new player to shake up the space by offering a new product at a revolutionary price point. There are lots of new PBX names in the space, but few in end-points.
@mgraves
I like your last two sentences. Brilliant market observation.
This is only true in America!
In Europe, DECT phones are really DIRT CHEAP !!
We’ve been using DECT phones for over 10 years now.
For example, the fantastic Siemens IP DECT systems are sold in supermarkets in the Netherlands for 50 euros, even at the current exchange rate that’s only 63 USD!
And that’s for a complete set: base with Ethernet and PSTN (up to 6 handsets with seperate SIP accounts), handset with color display, and tabletop loader.
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