Prices and Costs for external Product Development

Components of a complete Offer

Development Effort

The development effort should be specified in hours.

It should be sufficiently broken down into sub-areas, such as specifications, hardware, layout, firmware and verification & validation. In this case the client and contractor can agree on the respective expectations.

(External) Validation Costs
If the contractor carries out the validation with external validation laboratories, their costs should be clearly recognizable.
Industrialization
If the series transfer is also to be carried out by the contractor, then these expenses must also be listed, including the investment costs in testing and diagnostic stations.
Sample Costs
The costs for samples, from evaluation boards, A-samples and B-samples to release samples, should be detailed using a sample plan.
Licensing Costs
If special software or hardware is to be used during development and the development partner does not provide these, then the costs for these tools must also be listed.
Intellectual Property of Third Parties
If third-party patents or trademarks have to be used, the costs of licensing this intellectual property must also be included in the total costs.

What factors influence the costs of product development?

1
Project Size
The number of primary and secondary functions of the module influence and determine the size of the project.
2
Complexity
If implemented functions require a lot of hardware and firmware, this has a significant impact on the complexity of the project and requires increased coordination.
3
Technical (residual) Risk
Sometimes it is not possible to completely eliminate the technical risk before series development. This can lead to unplanned, but very important, development loops.
4
Process Requirements
For some developments, there are precise specifications as to how development must proceed, e.g. to ensure functional safety. This can lead to additional costs.

What costs should you expect in product development?

Complete Development of an Assembly

A complete development of an assembly without housing, from specification to series transfer, can cost between €6,000 and €500,000. A typical development in data transmission, however, is between €150,000 and €200,000.

PCB Layout

Offers for PCB layout are also not easy to limit due to their diversity. You should budget between €2,000 and €80,000 for your project. A typical layout in data transmission is between €30,000 and €60,000.

Preparation of Specifications

Specification work can take a very long time and consume many hours of work over various iterations. An exact estimate is also difficult here. However, if a clear idea of the product is given and a clean, approvable document is required, the costs are manageable and range from €10,000 to €25,000.

Please also see our fixed price offer for the creation of specifications in the field of industrial communication.

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