Embedded systems are fairly cost sensitive. Ideally, all the
electronics--CPU, all the ROM and RAM, and all the I/O
controllers--should be on a single chip to reduce the manufacturing
cost. A smaller system means a smaller chip which means more chips per
wafer. Knocking $1 off the manufacturing cost can knock as much as $5
off the selling price. In a competitive market, being a little bit
cheaper than your competitors has real value. There are people who will
buy a DVD player for $34.95 over an equivalent one for $39.95.

Andy Tanenbaum

LinkSys writes:

> We sell literally hundreds of thousands per month.

Karram writes:

> But, I am thinking how licensing an RTOS can be
> cheaper than adding more flash and ram.

Andy writes:

> Embedded systems are fairly cost sensitive.

Absolutely. Save a buck per unit, and at hundreds of thousands per
month, it turns into millions quickly.

I have worked with product managers who maintained their jobs by
covering their salary through simple cost reduction initiatives.

There is a bottom to what you can sell hardware for and remain
profitable or break even. But a commercial RTOS vendor can discount to
near zero on high volume, because his NRE (non-recurring engineering,
the one time cost to develop the RTOS) is already paid by previous
funding or customers. If the per unit hardware savings were only 20
cents, and VxWorks licensed at 10 cents per unit, LinkSys and VxWorks
still each realize a windfall that would pay off my house rather
nicely. Over and over again.

But if LinkSys could get that dime back per unit by replacing VxWorks
.... they wouldn't hesitate.

Thanks.

Jim