Why is digital so expensive?

[kb2vxa]

"I wonder if FM radios when new costed 3 times as much as AM radios?"
When FM was new General Electric offered FREE receivers to people in New York tuned to W2XMN in Alpine NJ, Americas first FM station developed by Maj. Edwin H. Armstrong. The promo was just like the song goes, "FM, no static at all."

Speaking of New York, somebody around here heard Howard Stern's jokes about the Soup Nazi. (;->)
"I am the Scanner Nazi. No monitoring for you!"

 

[k8mcn]

IMHO another reason for the stable higher prices is demand--yepppers, there are a bunch of us scanner nuts around, but when compared to the market demographic for TV,stereos, DVD, Blue Ray etc. We are minuscule, and the manufacturers have to get a payback for the engineering, licensing and production,
The payback on the investment for the manufacturers is probably a 100 fold less for scanners versus more mainstream electronics.

 

[DonS]

The primary reasons digital scanners are much more expensive are, in no particular order:
* Extra per-unit costs for hardware
* Much more NRE with a smaller number of units to recover it
* People pay for them

Things that have little or nothing to do with a $300 price difference:
* Motorola
* DVSI licensing

 

[poltergeisty]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)
No. Why would you think that???

Non-Wirelessly posted (strawberry1337/4.5.0.110 Profile/Wonka 876.11 Configuration/CDC666 VendorID/Poltergeisty



Because I'm a brilliant capitalist.

 

[mully95]

Go digital and join the crowd.

 

[ksphotoguy]

Radio Shack store cost of their current digital scanner is 150 bucks. Decide for yourself why they're so high

 

[mully95]

Radio Shack store cost of their current digital scanner is 150 bucks.

Can you give more info please on what model scanner?

I would like to check in on that.

 

[jim202]

Hate to pass this on to you, but the vocoder that DVSI has developed that everyone uses
for digital is not a give away. They get a licensing fee for every radio and scanner that uses
it. Do you think they give this away free. I am not privy to the exact amount, but it is not cheap.

Jim

The primary reasons digital scanners are much more expensive are, in no particular order:
* Extra per-unit costs for hardware
* Much more NRE with a smaller number of units to recover it
* People pay for them

Things that have little or nothing to do with a $300 price difference:
* Motorola
* DVSI licensing

 

[DonS]

Hate to pass this on to you, but the vocoder that DVSI has developed that everyone uses for digital is not a give away.

Of course it's not. I never suggested that it was. I merely said the cost of that vocoder is not a significant part of a $300 price difference between analog and digital scanners.

They get a licensing fee for every radio and scanner that uses it.

That may be true for some licensing terms, but I don't think anyone can claim it's true for all radios or scanners that use the vocoder, since I doubt any of us are privy to all such licensing agreements.

Do you think they give this away free. I am not privy to the exact amount, but it is not cheap.

It might depend on your definition of "cheap". DVSI does sell their vocoder, embedded into hardware (a TI DSP), for $20 in very small quantities. Depending on licensing terms, quantity of units, etc., the per-unit cost of a software license could be more or less than that. Or, a radio or scanner manufacturer could find a way to use the DVSI hardware product, buying in sufficient quantities to bring the price below $20.

 

[BaLa]

The Governmet doesn't want you (us) to buy one, so they jacked up the prices. :rotfl:

 

[jim202]

The government has nothing to do with it. Don't understand why you even make that statement.
The cost of a scanner is not regulated by the government. It is based on the cost of manufacturing
and a markup to make a profit. The markup depends on just how greedy a company is and what
the market will bear. In the scanner world, there is not that much demand, so the mark up is not
that great so they can sell the scanners.

This is not Microsoft that had the entire world wrapped around their fingers. This is a dumb radio
market for the people that like to listen to the public safety communications. Not everyone has one
and never will, Sure there is a good number of people that have scanners, but compare that to the
number of computers in the world. The high volume sales are just not there.

As for the cost of the vocoder that goes into any digital radio today, why don't you go to their
web site and see for your self just how much they get for them. Don't take my word for it that they
are not cheap. Don't go around saying the cost is low before you go see what the true price is.

Jim

The Governmet doesn't want you (us) to buy one, so they jacked up the prices. :rotfl:

 

[kb2vxa]

"He's dead Jim." and sarcasm is lost on you. (;->)

 

[SCPD]

Because its NEW!

57 T-Bird was expensive (In 1957 standards compared to a Model-T and a Model-T was expensive over a horse)

I guess none of you remember when the PRO-2052 was 499.99 when Trunking was new?

The price on some Digital radio is coming down, When the market is saturated and everyone uses Digital the Digital scanner will come down in price also. a Pro-106 will cost 99.00 on clearance and everyone will be squawking about the outrageously priced Digital scanner of the time period then .....

 

[jim202]

There is no sarcasm here as you call it. I am not trying to flame anyone. Just trying to answer the
reason why the scanners cost so much. People think that DVSI can just give away the software
that they spent hard earned money on to develop. They have the legal ownership of it and the rights
to the vocoder. Unfortunately, it is the vocoder that Motorola chose to use back when and the industry
is sort of stuck with it until another one comes along that can work with it and be better. Those that
are making statements, should do some homework to make sure their comments hold water.

If you have an issue with this, then I am sorry your feathers got worked up. It's history that was
set in motion years ago by Motorola and DVSI that neither you nor me have the ability to change.
All I am trying to do is lay the facts out for those that have no understanding of how the digital radio
industry got to the point it is today. The scanner makers have to buy the vocoder just like any
other radio company does.

Now there is a different vocoder that EF Johnson is starting to use. I don't know much about it and
will wait until the industry provides some better feedback on how well it is playing in the digital radio
systems. I have yet to have the opportunity to to get my hands on one of the newer radios with
this different vocoder. When I do, I hope to put the radio through it's paces and see just how well
it performs. The big question is the issue with high background noise on the current vocoder
causing major audio distortion to the users voice. The fire departments have made a whole bunch
of noise to Motorola and others about this problem. There have been a number of magazine
articles published on the background noise problems. Time will tell if there has been a breakthrough.

Jim

"He's dead Jim." and sarcasm is lost on you. (;->)

 

[John_M]

The development cost for the added complexity of the digital scanners is part of the reason for the $250 price difference.

 

[DonS]

As for the cost of the vocoder that goes into any digital radio today, why don't you go to their web site and see for your self just how much they get for them. Don't take my word for it that they are not cheap. Don't go around saying the cost is low before you go see what the true price is.

The cost is low for the hardware solution: the price for the part used in some D-Star radios (AMBE-2020) is $20. Even the full-duplex part (AMBE-2000) used by such things as the DV Dongle is only $33. (These prices described by the "DV Dongle guys" back when that device was in development).

In 2007, DVSI was quoted as confirming the $20 price here:

"Yes, you can purchase the AMBE-2020 chips.
In small quantities the price = $20.00ea + shipping
charges. We accept MasterCard and VISA credit cards.
Regards,
Bob Maher
Digital Voice Systems, Inc.
234 Littleton Road
Westford, MA 01886
Tel: (978) 392-0002
Fax: (978) 392-8866
web: www.dvsinc.com"​

(If you doubt this, call them up and ask them for current AMBE-2020 prices in various quantities. Or, call up the guys who make the DV Dongle and ask them what they pay for the higher-cost AMBE-2000.)

It's pretty clear that the per-unit cost of the vocoder can be as low as $20 (2007) - perhaps lower if buying in sufficient quantity. Given that, and without direct evidence to the contrary (i.e. the specific licensing agreements between DVSI and various scanner manufacturers), it is not logical to presume that a scanner manufacturer is paying to DVSI some significantly-higher per unit cost.

 

[n5ims]

"Use of the AMBE standard requires a license from Digital Voice Systems, Inc. While a licensing fee is due for most codecs, DVSI does not disclose software licensing terms. Anecdotal evidence suggests that licensing fee begin from between $100,000 to $1 million."

Advanced Multi-Band Excitation - Wikipedia, the free encyclopedia

 

[DonS]

Key word: "anecdotal".

Without actual hard evidence, [almost] nobody is in a position to say that the DVSI vocoder costs a scanner manufacturer any more or less than the $20 price for the AMBE-2020 hardware.

Even if we make wild, unsubstantiated assumptions like a) the "$100,000" fee is valid and b) DVSI gets something like $15 per unit (on top of the $100k), then a manufacturer only has to sell 10,000 units before the per-unit DVSI cost drops to $25.

Personally, I do know what one manufacturer paid DVSI in the past. I also know what that manufacturer paid for certain other, non-vocoder-related software development. (Clearly, I'm not in a position to disclose these numbers, so we must consider them "anecdotal"). That said, I do know that the NRE cost for this "other" software development was several times what was paid to DVSI.

 

[DonS]

"Use of the AMBE standard requires a license from Digital Voice Systems, Inc. While a licensing fee is due for most codecs, DVSI does not disclose software licensing terms. Anecdotal evidence suggests that licensing fee begin from between $100,000 to $1 million."

And, of course, there are no "licensing fees" or "royalties" if a manufacturer chooses to use the ($20 in 2007) AMBE-2020 parts, or similar. From DVSI's site, to which I'd likely give more credence than I would to a Wiki article:

"DVSI developed the AMBE-2020™ Vocoder Chip to offer the latest AMBE® Voice Compression Technology with no licensing fees, royalties or the engineering expense typically associated with custom DSP software implementation. With small quantity off-the-shelf availability, this DSP provides low-risk cost-effective voice compression." (emphasis added)​

 

[DonS]

People think that DVSI can just give away the software that they spent hard earned money on to develop. They have the legal ownership of it and the rights to the vocoder.

Nobody here has said that DVSI "gives away" the vocoder. All that's disputed is how much it costs a scanner manufacturer per-unit.

Those that are making statements, should do some homework to make sure their comments hold water.

I've done that homework. I've provided evidence that the vocoder can be obtained from DVSI for $20 per unit (rather, it could in 2007). Current numbers can be easily obtained by calling DVSI and asking for pricing for the AMBE-2020 product in various quantities. That device would work just fine in a "digital trunking scanner" - the scanner manufacturer would be the one to decide if that $20, plus any costs incurred to integrate the part into the rest of the scanner's hardware, is cost-effective. Personally, I highly doubt that any manufacturer would be paying significantly more than $20 per unit for such functionality - since it is (was in 2007) clearly available for such a low DVSI cost.

You are welcome to do your own homework and either a) provide verifiable evidence that refutes my "$20 in 2007" claim, b) provide verifiable evidence that the 2007 $20 hardware price has significantly increased to the point where it would be some large part of the $300 price difference, or c) provide verifiable evidence that scanner manufacturers actually pay significantly more than ~$25 to DVSI.

Until such other homework is done and verifiable evidence provided, any claims that the DVSI vocoder accounts for some large part of a $300 price "surcharge" for a digital scanner are merely unsubstantiated rumors. Please substantiate them, if possible.

With all due respect, I feel that, at this point, it's necessary to be blunt. I don't know of a nicer way to say it, but: put up or shut up.