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Building a Flexible Business Model

A low-cost, high-performance tech product is about to hit the market and will be available only through limited distribution. Sound familiar? When the Raspberry Pi hit the market, its two distributors were immediately overwhelmed with orders. A comparable product launch is shaping up, and {complink 12809|element14} is ready.

{complink 2134|Freescale Semiconductor Inc.}, at its annual FTF Americas conference this week, launched its Freescale Freedom development platform for Kinetis KL2 32-bit MCUs. Targeted at applications in small appliances, gaming accessories, portable medical systems, audio systems, smart meters, lighting, and power control applications, the platform allows designers to leverage 32-bit capabilities at 8-bit to 16-bit price and power consumption levels. Element14 is the only distributor taking pre-orders for the board, which will be available at the end of September.

The move is a departure for the catalogue distributor, which specializes in quick-turn, low-volume orders. “It is a unique case in that it allows people to pre-order a product so they can be first to get access to the part,” Jeff Jussel, senior director of technical marketing, Newark element14, told EBN.

“This is a situation where we are collaborating closely with our supplier and allows us first access to new markets that we think will generate interest. It also allows our supplier to gauge demand before the board is in play. We believe that designers will be able to get a running start in a wide variety of applications.”

The platform is also priced at a level Freescale believes will spur high demand. When the $35 Raspberry Pi computer was released in February, element14 and RS Components sold out within hours.

“This is a bit different in that Raspberry Pi is a computing platform where Freescale Freedom is a development platform for embedded systems,” said Jussel. Raspberry Pi was developed and is sold by a charitable organization, whereas Freescale is a long-established supplier to the electronics supply chain. Nevertheless, element14 learned a few things from Raspberry Pi. “Freescale Freedom provides easy technology adoption at a low price point and is applicable to a wide variety of markets,” said Jussel. “We learned a lot about our ability to handle incoming orders and new product introduction through the Raspberry Pi. That's part of the learning curve.”

Element14's engineering community and design site The Knode also factored into the relationship. “We are partnering in a new way,” Jussel said. “Because we have a connection with the community and provide both development tools and services, we really do offer a full solution.”

6 comments on “Building a Flexible Business Model

  1. Nemos
    June 22, 2012

    “A low-cost, high-performance tech product is about to hit the market “

    The need of high tech software like this is huge, and you can see it from the market response. But will be like the Raspberry Pi or it is something totally different?   

  2. Ariella
    June 22, 2012

    @Nemos it seems to be based on a different platform based on the quote: “'This is a bit different in that Raspberry Pi is a computing platform where Freescale Freedom is a development platform for embedded systems, said Jussel. Raspberry Pi was developed and is sold by a charitable organization, whereas Freescale is a long-established supplier to the electronics supply chain.”  

    The implication that they are emulating the business model behind the development of Raspberry PI more than the system of the computer itself to bring good, low priced products out. 

  3. Barbara Jorgensen
    June 22, 2012

    @Ariella–well said! The products are different, but the purchasing dynamic is the same: demand could outstrip supply. Most catalog distributors sell only what they already have in-stock becuase they guarantee one or two day shipment. For larger, advance orders, you look to a broadline such as Arrow, Avnet and Future. So element14 (a catalog) is breaking the mold by not stocking the product before it takes orders.

  4. Eldredge
    June 25, 2012

    While they may have diffuculty meeting demand at first, this seems like a smart business model. Building to demand instead of forecasts eliminates a lot of potential waste in materials and production labor/resources.

  5. Anand
    June 25, 2012

    element14 (a catalog) is breaking the mold by not stocking the product before it takes orders.

    @Barbara, thanks for the update .Any particular reason why freescale has chosen only 1 catalog distributor (element 14).  Isnt it good idea to have have tie-up with mutliple catalog distributor so that they can reach to more end-users ?

  6. Barbara Jorgensen
    June 25, 2012

    @anandvy: Freescale will sell the board through its other distributors; it's only element14 that is participating in the pre-order exercise. From what I can tell, element14's Knode, which provides desgin, development tools and prototyping services for the embedded market, factored into Freescale's selection. All distributors provide development tools and kits; the Knode integrates CAD software and a few other services that make the design-to-prototyping process quicker and easier. Since that's the intent of the Freedom platform, it sounds like a good fit.

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