While the three sexiest words in the English language are Custom, Android, and Hardware, do not allow their seduction to fool you into thinking the combination of the three is right for you. In fact, more often than not, Custom Android Hardware is lipstick on a pig. Let’s get into some of the different shades of lipstick.
Better Specs
Creating custom Android hardware to come out with the newest and best specs is a horrible mistake. You do not have an advantage over global established brands. Why would you get access to the newest specs before the big tier 1 retail brands that have money, experience, distribution, and relationships with core tech providers? They could destroy you with a fart. You will never be able to compete with the big brands on specs. Choose another endeavor and we’ll re-evaluate; Hatch will not support narcissistic lunacy.
Cash Money
You need money before you get into making any custom product, especially a custom Android product. Making custom Android hardware isn’t like funding a lemonade stand back in elementary school. In most cases it takes a bare minimum of $250k before there’s any physical hardware to show. There are several reasons for this. Check Hatch’s business model outline to get a better understanding. Until funding is in place, don’t stress yourself out with anything custom. Use commodity Android products to test your software and attract investment. If your idea and selling skills are so good that you can get investment without any tangible demos, at some point you’ll need to make a demo and should still use a commodity device for that.
Price Misconception
Cost plays an important role in business, so, undeniably, cost or goods matters, but don’t expect the same price for a custom Android product as for a commodity product advertised on Alibaba. All of Hatch’s clients use dedicated apps on their custom hardware. Most of the apps provide an ongoing service which generates recurring revenue for Hatch’s clients. Unlike mass market low-end commodity products, custom Android products have less volume, require unique skills to develop properly, take 8-12 months to develop, and require ongoing expertise and attention for continuous improvement. A trailer park home and a custom mansion sell at different prices.
Low Volume
Due to the fixed costs of developing a product, the economics generally work best when the initial order is at least 5k pcs, although 10k pcs helps development move faster. If the customer accepts a relatively high unit price or the product has minimal customization requirements then a lower quantity might be a valid option. The development cost is built into the unit price. This business model is common for manufacturers in China since sustainable, long-term, profits come from repeat volume production rather than one-off engineering services. In other words, the engineering services are a means to the end, rather than the profit center. Companies looking to get 200 pcs of a custom product made are generally not viable custom Android hardware customers.
And, briefly, here are some examples of when it would make sense to develop a custom Android device.
Organic Evolution
Your company has already been distributing apps on normal brand name devices or letting the customer use their own devices. With a proven business model, the demand for your service is either growing or at least stable. Over time, the problems of building a business around a mass market brand name device become increasingly evident. Finding the same hardware gets more difficult and expensive. The models change every year, meaning the apps need regular modification and testing to work smoothly with the updated hardware and Android build. These devices lack security, privacy, and control. Devices go out of warranty and become impossible to repair. The list goes on, as do the headaches. If this describes your situation, go ahead with the custom Android device, it makes sense for you.
Funded and Focused
Your properly funded start up or established company has hired people with custom hardware project experience. Going from nothing to a custom device is a giant leap, but since you’ve done the due diligence and brought on in-house resources, you’re doing the right things to have a successful project. Before engaging an ODM, like Hatch, you’ve gone through the project details and have a solid understanding of what you want to have done and how you want it done. In this case, you have the money, expertise, and a management team in place to support the effort.
Internal Use
Your company is the end user of the products. In this case there’s a clear business case and reliable volume prediction. If your company knows that it needs a custom product to better perform a service or function, then we start with defining the use case and build a product to perfectly address it. Since your company uses the products directly, you don’t need to worry about finding customers. The task is to make the best product to help your company cut costs and/or add value. Hatch will work on acquiring a deep understanding of the use case for the product and provide ideas for product design, hardware architecture, and other details related to the development and production of your custom Android product.
These lists of reasons, for and against making custom Android hardware, focus on the most popular examples we see, but these lists are not exhaustive. If you’re curious about whether it makes sense to get a custom Android product made, feel free to send an email. It’s a simple and quick way to get started.
