Why are OLED dive computers so expensive?

[meebs86]

If a dive computer were able to capture 100% of the market, it would still be an infinitesimally tiny blip- utterly invisible- in the consumer electronics world.

I highly disagree with this statement.

If there was only 1 model available, every active diver bought it, and upgraded to the latest model every say... 3 years.... that'd be at least a several hundred thousand units a year if not quite a lot more... not exactly a 'small blip' at least not compared to most non-blockbuster units out there.


But the fact that multiple companies sell multiple model lines to stores that make quite a nice profit margin on the unit, the prices are pretty exceptionally high for what looks like essentially a fancy watch.

I am curious though as to how many 'active' divers there are in the world.. and how many dive computers are used world wide at least once a year....

[RonR]

I highly disagree with this statement.

If there was only 1 model available, every active diver bought it, and upgraded to the latest model every say... 3 years.... that'd be at least a several hundred thousand units a year if not quite a lot more... not exactly a 'small blip' at least not compared to most non-blockbuster units out there.


But the fact that multiple companies sell multiple model lines to stores that make quite a nice profit margin on the unit, the prices are pretty exceptionally high for what looks like essentially a fancy watch.

I am curious though as to how many 'active' divers there are in the world.. and how many dive computers are used world wide at least once a year....

Well, based on pretty decent industry knowledge, the total number of dive computers sold annually worldwide by all manufacturers is considerably less than several hundred thousand. The fact is that most newly certified divers drop the sport after a few years at best, or dive only occasionally. No one knows how many actual "new diver" certifications (as opposed to specialty, included in PADI statistics) are given out every year, but 200,000 is a a not unreasonable estimate. A minority of those buy equipment. A smaller minority buy computers, and those mostly at the low price end. Most gear sales (all kinds) are to new divers.


But, to the original point, even if several hundred thousand dive computers could be sold by a single manufacturer, eliminating all other models, it wouldn't change anything about the economics of scale in electronics manufacturing. Samsung, at the moment the premier supplier of AMOLED displays used in cell phones and other devices, and almost the ONLY supplier in current production, does not use distributors and will not consider selling to you unless you can guarantee purchases of 200,000 per month- we tried. Analysts expect Apple will sell 30 million iPhones in the first quarter of this year. That's about the range where consumer electronics become inexpensive. Several hundred thousand units per year would still be a small blip, and we are nowhere near that number.


Dive stores have higher margins than electronics retailers, because they have much lower volume, and they provide other services. Ask you LDS if they could keep the doors open on a 15% margin- they couldn't. Store owners I know would be ecstatic if all their customers replaced gear like dive computers every three years- divers that dedicated are a tiny minority.


Manufacturers of dive computers pay higher prices for components. They pay more for assembly. They don't have the ongoing service plans that subsidize cellphone purchases. They must amortize significant development costs and tooling costs over a very small number of sales. If it were possible for a company to make dive computers for less it would be happening- it's a competitive world. Some small modules that have been around for years probably are making pretty good profit percentages, but the original question was about why state of the art OLED computers cost so much. I know personally that we tried to keep the Cobalt as low cost as we could, and if there were any way to bring the cost down without compromising design or quality, we would do it. I spend a good bit of my time trying to work on ways to make things more economical. We would love to be more competitive. Nobody doing this is getting rich-far from it. It's a very risky business.


Speaking as someone who has worked on both consumer product and dive computer product design, dive computers are more demanding and complex to develop- by a big margin. They are not anything like wristwatches (or GPS units, or phones, or game players…) in terms of what they need to do. The firmware must handle complex tasks in real time and give correct information to a diver who may do unexpected things. Implementing a decompression algorithm as part of a real-time system is far more difficult than implementing it in a desktop software package. It would be very easy to underestimate the complexity of developing a dive computer, even for experienced embedded systems designers. Support is also a major issue. Products built for small markets just end up either being expensive or not existing at all.


As to wondering how many divers there are in the world, nobody knows. Undercurrent surveyed the available information a few years back, and you can look at it here: How Many Divers Are There? : Undercurrent 05/2007

Ron

[jetismyname]

RonR thanks for the thoughtful explanation here. Very helpful.

[Jax]

Another way to look at it is that OLED are no more expensive then any other top of the line when it came out.

I've been watching them for years, and the top of the line is always the $1500, with CCR running $2k.

OLED is just the current top of the line.

[cbrich]

Analysts expect Apple will sell 30 million iPhones in the first quarter of this year.

Does anybody know how many iPhone4's Apple has sold since it was introduced, I am not talking about the 4s, I mean the original 4? I would suppect this number is a lot higher than 30 million.

I agree with Ron, diving market is a very small blip compared to the consumer electronics market, or even the Apple iPhone market.

200,000 (200 thousand): divers in the world

30,000,000 (30 million): Apple is expecting to sell in iPhones in the first quarter

313,000,000 (313 million): Estimated population of the United States (per Wikipedia)

7,000,000,000 (7 billion): Estimated population of the World (this number could be closer to 8 billion)

15,300,000,000,000 (15.3 trillion): US national debt


Extra facts (came off of Wikipedia) that some might find useless

Estimated Diameter of the Milky Way Galaxy: 100,000 - 120,000 light years or 600,000,000,000,000,000 - 720,000,000,000,000,000 miles (600 - 720 quadrillion)

1 googol: 10^100

[Hatul]

Besides, most people who certify don't dive after a few years, as a personal observation. So the numbers may be even smaller.

[ijdod]

the 200k definitely is not total divers in the world. I've heard similar numbers as total certified divers in the Netherlands alone.

[DiveNav]

Depending on who you are talking to ..... every year there are anywhere between 500k and 800k NEW divers being certified - worldwide.

Alberto (aka eDiver)

[Tigerman]

200k certified maybe, but how many of them is ACTIVE?
(From my trips to Egypt it would seem its quite a few. Brits as well :p )