Bespoke IoT product design
This page outlines how Lightbug typically works on custom IoT development projects. We know each project is different and requires some deviation from the standard template, but the principles outlined below should inform potential partners on how we do business.
There’s a lot here, you might want to grab a coffee…
Let’s get the most important part out of the way.
Note we assume the minimum order quantity (MOQ) of 1000pcs over 1 year has been met below. All prices are in GBP and exclude VAT and shipping where applicable.
Custom IoT Hardware Pricing
When we design a product for you, we know it is often mission critical and you can’t risk us arbitrarily bumping up prices. To show you we mean long term business we always price devices on a cost-plus model. Below is a table outlining how we normally calculate custom hardware prices
|Cost item||Typical Price|
|Component Cost (electronics, battery…)||£15-200|
|Assembly Cost in the UK||£1-5|
|License Fee To use our core IP*||greater of|
£15 or 30% of component cost
* Note this may be negotiable in volumes >10 000pcs. For orders less than 1000 pcs, £30 / 50% is more representative.
Some general examples:
- Lowest-cost bespoke tracker, 50 000 pcs with negotiated fixed fee
|Cost item||Typical Price|
- 10mm accuracy tracker with screen, 300 pcs (with 30% rule)
|Cost item||Typical Price|
Component prices do change (2021 was fun!) and new cheaper components become available. To incentivise cost reductions, after the first build, we will share any gains (or losses) with you 50/50. For example, if we get cost price down by £2, you save £1. If price goes up and we are applying the 30% rule, we share in the loses.
Custom IoT Enclosure Pricing
Below are the costs typically associated with creating a custom enclosure for an IoT device. The design items will be included in the sprint development (see the next section).
|Cost item||Typical Price|
|Preliminary Design for 3D printing||£1000 - 3000|
|Prototypes (x10 SLS 3D print)||£200|
|Design for Manufacture||£1000 - £5000|
|Tooling||£2000 – 15000|
Preliminary design can be completed by your company internally if preferred
SLS 3D printed prototypes look and feel very similar to the final product.
Design for manufacture: we take your feedback, alter and then prepare the design for tooling
Tooling: we get the tooling made for your custom plastics and if applicable: charging pins & antennas
Note the low end of price ranges are for minor modifications such as adding a logo or mounting point.
Custom Software & Electronic Design Pricing
Software work includes anything we might change to the firmware, back-end, or app. We run development in sprints (see next section). 50% of these fees will be credited to your first order of 1000pcs or more. See IP section for more information. Sprints are billed upfront, typically with NET30 terms.
Less than 5 days
5 days or more
- Change the LED pattern and make the tracker transmit on temperature change of more than 1 degree AND detected tilt angle has exceeded 30 degrees = 0.5 Day = £550 (£275 with credit)
- Add an E-INK screen that shows custom barcode as defined by external cloud API = 27 days = £18,900 (£9,450 with credit)
We manage long (5 Engineer days or more) custom development projects in 2 week "sprints". Each sprint represents a single unit of work and can include CAD (plastics) design, Software Development and/or Electronics Design.
At the start of each sprint, we have a 30-60min meeting covering:
- (if applicable) Review of work completed in previous sprint with breakdown of time
- Discussion of any new requirements / changes based on new information
- (Re-)Prioritisation of pending items
- Upcoming milestones or deadlines
The number of Engineer days per sprint is defined by you. We start at 4 days per sprint (2 days per week, £2,800 per sprint) to help you achieve manageable monthly payments but can scale up to "maximum capacity" when a project needs completing ASAP (maximum capacity varies based on how many other projects we have ongoing but is typically 10-20 Engineer days per sprint)
Taking the previous example of adding an E-INK Display. This could be achieved in 6x 5 day sprints (2.5 days per week for 12 weeks) with the following plan:
- Sprint 1: basic custom enclosure design and 3D print. Design custom PCB prototype
- Sprint 2: prepare for manufacture, finalise PCB design
- Sprints 3&4: [in parallel with plastics tooling] preliminary software implementation
- Sprints 5&6: Testing, tweaking, debugging and finalising "production" product
We can keep our prices low because we always maintain ownership of intellectual property we create.
We have to do it this way in order to make sure we’re always innovating and sharing those gains with all our customers.
If another product receives a network optimisation for operating in Alaska: we want all of your devices to get the same fix. Similarly, because we build all custom products on top of our core hardware and software modules: it is very difficult to separate IP ownership.
We acknowledge this isn’t what most businesses want, but we think the pros outweigh the cons. In recognition that we extract some value from the process, we will credit 50% of all development (IP creation) fees back on your first order of 1000 or more devices.
With the above in mind, we also know that you’ll want to secure your investment.
For distribution exclusivity we can offer any or all the below:
- International custom product exclusivity
- Territorial exclusivity
- Customer exclusivity
- Industry / Use case exclusivity
We will never sell to your direct competitors if you give us a reasonable way of identifying them. Note that any exclusivity is always subject to a yearly MOQ or minimum spend.
We like to think Lightbug will outlive us all, but we live in an uncertain world. To make sure you can continue on if Lightbug stops operating or is taken over by a hostile entity, we will put the following in Escrow:
- Back-end Docker images for you to take control of data ingress (see Siloed Listener for more)
- Hardware (PCB and plastic) design files and specifications
- Compiled firmware (always the latest version) to run on the hardware as designed
- Step-in rights for all hardware suppliers and SIM providers
- Instructions on how to use the above
This ensures that if Lightbug disappears tomorrow, you can continue manufacturing your devices exactly as you paid for them, as well as continue maintaining your existing fleet.
Escrow items do not include any information or rights allowing you to continue development or create different new versions of our technology, but there are provisions for bug fixes & security updates.
Finally, as with all Lightbug devices, there is also a data and cloud component to custom projects
SIM Card, Data and Platform fees
Monthly fees for custom devices will typically follow Lightbug standard pricing, read more about how Lightbug data pricing works here
Note that there will be an additional per device fee to cover the sim card activation and provisioning for 1 to 5 years as with our standard products. This fee can sometimes be waived in exchange for higher monthly rates.
Lightbug devices communicate with our cloud using a proprietary low power encrypted protocol. Typically, we will always recommend you allow us to manage this cloud resource but in some cases privacy or data sovereignty issues prevent this from being an option.
In such cases, you can use your own servers by licensing our ingress service as a docker image: this can be run on your own cloud and your devices can be pointed to your own FQDN so you have full control. Once set up, the siloed instance will generate new encryption keys and set up exclusive decryption of tracker data for your devices. Decrypted data is then pushed out to a message queue for further processing by your systems.
Siloed listeners comes at an additional cost of £500 per month for self-managed, or £3000 for fully managed deployments (flat rate). Silo license does not include user interfaces. Normal per device usage fees still apply.
Send us a sales enquiry to set up a call!