Quote from: Collider on July 22, 2014, 08:31:04 AM

This has been debated several times.

Spondoolies ("only") had around $4m in funding (before sp10).

Did they not make any money from the sp10? I'd be surprised if they ended up with less than $10m profit.

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Parts for sp30 production batches need to be ordered around 2 months in advance, chips more like 3.

This is a lousy excuse. At $0.1/gh (could be much lower) they would only need $1m for 3 months worth of sp30 chips. (at 500 sp30/month)

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Parts and manufacturing costs alone are around $2m per month (assuming 1000 units produced), and chip NRE is typically around $3-5M, which also needs to be gotten back.

Yes but how much of that $2m/month is long lead time parts?

Do you really think NRE is $3-5M?

I don't know exactly what makes up the NRE but I can't imagine a simple die shrink costs a bunch. AM's full custom 40nm cost less than 1m NRE.

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Unless you can produce money from thin air, there really is no other option to have customers pre-pay some orders.

How do you explain bitmain,asicminer,bitfury,avalon, and a1 clones which have zero problem selling from stock? The majority of the network is powered by miners bought from stock.

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Pre-payment or made-to-order also allows them to estimate their production volume much more accurately.

Yes, the only benefit of preorders is reducing the risk on the company and shifting it to the customers.

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To the traditional finance and even venture-capital industry, most things bitcoin related are very-high risk and it is therefore hard to find financing.

But spondoolies is already is fully funded by VC is it not? I remember something about how they have enough funds to cover all batches if they need to.

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If you do find financing, the investors will want a very high percentage of the earnings, which would lead to even higher unit prices for customers.

Yes everyone wants to maximize profits. The great thing about selling preorders is that you don't have to compete with what is available when they finally ship.

Do you think spondoolies would have sold sp30s for more than 12K in august had they not been preorders? Of course not.

TL;DR: preorders are BS. Get with the times spondoolies.