[Elecraft] KPA-800 etc.

[Erik N Basilier]

Rudy,

I think it is dangerous to reason based on assumptions about not only development costs but also overall margins and any other numbers that a company does not disclose. Making assumptions based on what is average simply doesn't account for the fact that every company is different from average. It is the kind of reasoning that the government engages in: destroying private enterprise by trying to replace the invisible hand with public beliefs.

That said, I think it is fair and useful to vent about what features are meaningful to oneself as a user, what one would buy or not buy etc. I don't think there is anybody out there who can speak for all or even for the majority of hams, and I think the Aptos folks want to know what we want at the individual level.

73,
Erik
  ----- Original Message ----- 
  From: Rudy Bakalov 
  To: elecraft at mailman.qth.net ; Erik N Basilier 
  Sent: Monday, May 18, 2009 4:05 PM
  Subject: Re: [Elecraft] KPA-800 etc.


        Erik,

        I would imagine that all of us on this reflector are here because we do believe that Elecraft products are superior and of great value.  However, it is important to distinguish between price and cost as it is this difference (the margins) that fuel product development.


        Let's assume for a moment that Elecraft sells about 1500 K3s per year for an average price of $3,500.  Let's also assume that the team makes a decent living in CA and each of the 4 members brings home about $125,000 per year.  Right there we have a fixed labor cost of $500,000 per year or about 10% of sales.  As you can see, not much is left if the overall company margins are in the 10-15% range, which is normal for low volume manufacturing.


        Why do we care about all this?  We do because it is important to understand how our desires and demands for features, products, etc. impact the bottom line and, based on that impact, the likelihood of them happening..


        So, do we want amps at the expense of superior core products performance?  Is there a unique amp feature that existing products do not meet and therefore there is an opportunity for Elecraft?  Can we live with an OEM product?  These are some of the questions that are important to consider and naturally the answers will be different for each of us on the reflector.


        Elecraft is an amazing company that despite its size has truly changed the competitive landscape of the ham industry.


        Rudy N2WQ
        --- On Mon, 5/18/09, Erik N Basilier <ebasilier at cox.net> wrote:


          From: Erik N Basilier <ebasilier at cox.net>
          Subject: Re: [Elecraft] KPA-800 etc.
          To: "Rudy Bakalov" <r_bakalov at yahoo.com>, elecraft at mailman.qth.net
          Date: Monday, May 18, 2009, 5:59 PM


          IMHO it seems that Elecraft has a unique formula for superior development work at lradically lower cost (just look at what they have done with so few people), and I don't think they want to bring that cost up to what other companies are paying. Telling them what they are not able to do doesn't seem like a good bet.

          73,
          Erik K7TV

          ----- Original Message ----- From: "Rudy Bakalov" <r_bakalov at yahoo.com>
          To: <elecraft at mailman.qth.net>
          Sent: Monday, May 18, 2009 2:23 PM
          Subject: [Elecraft] KPA-800 etc.


          IMHO, taking the OEM route is Elecraft's best approach to meeting the demand for amplifiers and other products that are expensive to develop and bring to market. Elecraft is a small company with very limited capital and resources and new, R&D intensive products are unlikely to be commercially viable.