5 Ways to Slash the Cost of Your IoT Device

By Nuvation | Feb 21, 2014

With the booming demand for IoT devices, everyone is getting connected. Our clients want to make new and innovative products that are connected to the internet, but they’re not willing to sacrifice their bottom-line with expensive wireless integration. So, how can you create a top-quality, yet affordable wireless device? Here are five strategies that have allowed us to deliver products to market for mere dollars apiece.

Slash the Cost of Your IoT Device

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1. Choose the right SoC

System on a chip (SoC) manufacturers are creating modules with IoT applications in mind, and there are many parts available to help you meet design requirements, and sail through FCC emissions testing.  If you use an SoC, the part you select will have the single biggest impact on the end cost of your product.

It’s important to understand your design requirements and find a part that meets them, without providing extra features and the associated extra cost that you don’t need. For example, a part with both Wi-Fi and Ethernet is overkill if you’re only using one technology.

Manufacturer’s SoC evaluation designs and kits can provide valuable insight on how specific parts can be implemented best. Nuvation design partners NPX and Texas Instruments have a lot of great options in this space.

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2. Consider Battery Requirements

Designers usually opt for a lithium coin cell as their primary non-rechargeable battery.  The volume costing is affected by sales volume, such that a 224mAh CR2032 battery can be cheaper than a 90mAh CR2016 battery with less material and lower capacity, or other less common sizes of battery. Research the options that are suitable for your product, and don’t assume that the smallest battery will be the most cost-effective.

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3. Minimize BOM Cost

General good practice BOM cost reduction techniques apply to IoT device designs, such as consolidating component values and avoiding over-engineering.  Of particular importance to IoT device designers is the need to examine the tradeoff between the cost of external circuits, and circuits integrated within an SoC.

Many SoCs contain:

  • Built-in power regulation and battery charging circuits, to reduce the amount of external power circuits required
  • Peripherals such as ADCs, GPIOs,  and SPI and I2C interfaces
  • An integrated PHY (not very common yet, but especially helpful if Ethernet is going to be used)
  • Additional code ROM with peripheral driver code, to save on other memory requirements. (Texas Instruments’ TIVA C series now has this.)
  • Other miscellaneous features such as crystal loading capacitors internal to the SoC, with programmable capacitance values

An SoC with the circuits you need integrated may be the cheaper than adding them externally, but don’t automatically assume that’s the case; examine both options.

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4. Consider Manufacturing Costs

A key factor in understanding low-cost design strategies is the realization that it’s the designed-in price that matters. Every passive added to support a system may only add $0.0017 per part to the BOM (typical for common small passives), but actually assembling it on the board is $0.02-$0.03 per part budgetary. So, comparing two solutions where one has cheaper ICs but more passives may not actually be cheaper in the end.

Another determinant is the PCB cost, which is a result of the number of PCB layers, part pitch, and manufacturing technology required. A larger part may have a two-layer routing solution, while a smaller part may have 4 layers and require via-in-pad technology.

Programming and test time are also often overlooked.  Programming and verifying a processor that uses a two wire programming interface can take 15-30 seconds.  Testing adds additional time. Multiple programming and test fixtures at assembly time can exploit parallelism and keep costs down.

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5. Understand the NRE Tradeoff 

There is always a trade-off between upfront non-recurring expenses (NRE) and the end product cost. For example, in the case of a frequency-sensitive design you can use an external filtering component, or build a low-pass filter in code. The component will add to the BOM and manufacturing cost, but developing the code will take engineering effort.

Aggressive time-to-market goals are also the enemy of low cost design. The fastest way to create a product is to use an off-the-shelf solution such as a reference design, and modify it as little as possible. With this approach you miss out on many cost reduction opportunities for both components and manufacturing. Knowing your production volume and assessing the time-to-market impact for a product will help you balance the cost from a business perspective.

We’ve used these strategies to deliver low-cost electronic product designs for medical, consumer electronics, and green energy applications, among others. Contact us to learn how our experienced engineers can meet your IoT device price targets.