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Wireless technology is growing up, providing OEMs with a plethora
of lucrative opportunities in virtually every conceivable industry.
On land, at sea and even in the air, OEMs can now offer RF products
that make it easier, faster, and more cost-effective for their
customers to deliver information and services. Retailers, including
restaurants, department stores, and gas stations, are using mobile
Point of Sale devices to more conveniently process credit card
transactions. Airports and hotels rely on wireless signs to inform
their customers of changing rates and/or schedules. Sports facilities
use wireless scoreboards to update game-day scores and statistics.
Trucking companies depend on RF systems to more rapidly input
maintenance and cargo data, and auto makers and dealerships use
RF devices to swiftly input and retrieve diagnostic data.
However, these opportunities are not without challenges, and OEMs
must determine whether to build or buy the wireless radios their
products require. They must weigh the cost, performance and time-to-market
tradeoffs of each approach - a decision made more complex by the
advent of RF chipsets. Priced on average at $3-$5, these chips
at first glance may appear more attractive than buying a comparable
$20 radio. Moreover, according to chipmakers, OEMs with a modicum
of in-house RF design expertise can simply glue the chip on a
circuit board to quickly bring the product to market.
For short-range, remote control operations that require only a
single frequency, minimal protocols, huge volumes and little intelligence,
e.g. keyless entry devices or garage door openers, building the
RF component is both a viable and economical choice. However,
for intelligent applications where data must be accurately and
rapidly exchanged, using a chipset to develop an RF system is
like trying to make a PC from scratch using just a microprocessor.
It simply leaves out too many critical variables.
One European OEM recently learned this the hard way. The firm
built a single-frequency RF-based telemetry system that worked
perfectly in laboratory and field tests. However, shortly after
deploying it in 500 installations the OEM discovered the frequency
the system used was identical to the frequency used in an automaker's
car alarms. In cases when data transmitted from the radio matched
a nearby car alarm's code, the signal triggered the alarm. After
spending $300,000 and 18 months to build the system's radio, the
OEM quickly solved the problem using ready-made AeroComm radios
that flexibly hop to alternative frequencies to avoid interference
from other RF devices.
Expertise Matters
Even in simple applications, OEMs must ensure their RF
device's have sufficient mechanical strength, water and temperature
resistance, electrical properties and the proper architecture
to minimize interference. Beyond the realm of chipmakers, and
with no "Radios 'R' Us" to turn to, OEMs have been stymied
by these decisions. Many have resorted to lengthy trial and error
processes that have dramatically driven up their production costs
and significantly increased their time-to-market. In worst cases,
OEMs took so long to get their RF systems to work, they were beaten
to the market by competitors who bought radios.
Much to the chagrin of these and other OEMs, using $3-$5 chipsets
to make radios in- house is far from the bargain they envisioned,
especially when building RF systems that require interference
immunity and data integrity. In these cases, OEMs must engineer
functionality that goes far beyond chipmakers' application notes,
starting with RF protocols that govern the radio's operations.
They must be able to write a suite of RF software that instructs
radios to hop in synchronization with other radios to avoid interference
and that acknowledges that all messages are delivered and received
accurately. They must use the appropriate unlicensed bands in
each country they plan to sell their products and obtain agency
approvals. Many chipmakers often neglect to tell them that the
902-928 MHz band, while used widely in the North America, is licensed
for GSM telephones in Europe and unavailable on the continent.
The Ready-made Alternative
Given all this complexity, OEMs seeking to design, build,
test and support RF devices require considerable engineering expertise
and an infrastructure that far exceed the cost of chipsets. First,
OEMs must shoulder a myriad of direct costs, including materials,
assembly, and test. More importantly, OEMs must brace themselves
for a cache of even more expensive hidden costs. These expenses
include hardware, firmware, manufacturing, and test engineering,
as well as diagnostic equipment, project and quality management,
training, best practices, software licensing, and office space
for new employees. OEMs must also cover the hidden costs of obtaining
agency approvals, an iterative, time-consuming process that typically
runs $25,000 in Europe and the U.S.
Figuring these hidden costs to the $3-$5 chipsets meteorically
increases the OEM's production costs, easily adding $500,000 to
the average RF development project. An OEM building a 900MHz RF
component, for example, will spend $500 per unit in hidden costs
and $21 for direct costs for 1,000 devices. For 10,000 units,
the OEM will incur $50 in direct costs and $15.75 in hidden fees.
OEMs who make their own radios can also expect an 18-month time-to-market.
By contrast, buying a ready-made RF module can shave an OEM's
time-to-market to as little as six months, while reducing its
total cost per unit to $34.95 for 1,000 devices and $24.95 for
10,000 systems.
Making the 900MHz component becomes economical only when producing
more than 100,000 devices where the costs dips to $20 per unit
to build vs. $19.60 to buy. However, this potential saving is
more than offset by the enormous speed-to-market benefits of buying
an RF system. At greater than 100,000 units, the savings an OEM
will reap is minuscule compared to the revenue and competitive
advantages of launching its product in one-third the time.
OEMs who buy their radios from a credible RF vendor can also be
completely confident of their performance. AeroComm, for example,
invests more than 20 man-years in engineering RF protocols and
fine-tuning radio parameters to optimize radio performance in
extreme temperatures, in the presence of interference, and at
varying power requirements. AeroComm radios also conform to industry
standards, such as RS232 and RS485, enabling OEMs to flexibly
deploy them for virtually any application.
In addition, OEMs who buy ready-made RF modules enjoy the cost
and competitive advantages of using radios that are already lab
tested, field-tested and approved by regulatory agencies worldwide.
Outsourcing RF development also enables OEMs to harness the latest
RF technology and focus on their core competence. Most importantly,
a dependable RF supplier can help OEMs deliver higher quality
products faster, enabling them to spend less on production and
increase their profitability.
OEMs should be careful to select a RF vendor with proven expertise,
financial stability, and a strong track record of customer satisfaction.
In so doing, they can capitalize on the fruitful opportunities
wireless applications hold out for their enterprise and prosper
at a time when so many others are struggling.
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