

Tiny HDMI streaming 'stick' - ChuckMcM
http://arstechnica.com/gadgets/news/2012/01/roku-plans-tiny-hdmi-streaming-stick-for-smart-tvs.ars

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ChuckMcM
So this is why I think the Rasberry Pi folks are waaaaaay under estimating
their potential. This is exactly the kind of thing where a small processor
with WiFi and HDMI and poof you've got a TV add-on.

An alternative version of this same gadget is a 'picture frame' type device
where the your Picasa, Flickr, G+, or Facebook feed acts like a screen saver
on your TV.

This 'class' of gizmo retails for $99. If you can build all the hardware for
$35 you're done. (that is 42% gross margins while offering distribution
channels 40 pts) It works like this, you buy them for $35, you sell them to
the distributors for $60, they sell them for the MSRP of $99 and get $40 on
every one sold, or if they want to put them on sale $10, $20, or $30 on each
one sold. If you divide your gross into 1/3 for R&D, 1/3 marketing, and 1/3
for re-investing into the company, you get $14M for engineering, $14M for
marketing/sales, and $14M in cash flow to offset
tooling/depreciation/rent/etc. For every million units you sell.

Note its important to offer the distributors an attractive margin since they
have a zillion things competing for their space, and at 40% they are strongly
motivated to move your product. Six million units a year is not an
unreasonable estimate (in my opinion of course) so that is a 360M$/yr
business.

