Two sources. One is a teardown of the HR22-100 from last year that gave the build cost at $188. I could give you a link but its a subscription product and you have to purchase it, and I'm not allowed to disclose the content detail.
Here's the link:
Teardown Analysis - DirecTV Plus HR22-100 HD DVR Set-Top Box - iSuppli
Other source is to break it down ourselves. The broadcom hd dvr chipset which includes just about everything is around $32 in ~10k unit quantity. The WD disk drive in most of these retails for ~$45. The PCB and supporting piece parts with soldering and assembly are going to run around $30-35. The power supply is around $25-30 in quantity one. Sheet metal and box assembly around $30 in larger quantities. Couple of bucks for some cables and the cardboard box it all goes in.
That puts us around $160-180ish without a remote, and I'm sure directv's suppliers get better quantity discounts than 10k unit or single unit pricing. Plus they have a handful of box builders to keep the box pricing competition going.
I'm sure the HR20-100's back 3+ years ago cost a lot more to make. There were a lot more components on the board, the memory it used was expensive then, the disk drive cost a lot more, there were two outboard plug in satellite tuners, it had OTA tuners that cost a good bit, and it required a much more powerful power supply due to the larger content and chips made with a larger nm process.
A corollary to this is the tivo HD. Except for the satellite tuners which are largely integrated in the newer broadcom chip sets without a big hike in the price, the content in the tivo HD is very similar to several of the HR series dvr's. You can buy brand new tivo HD's for under $200 and refurbs for $99. Since tivo may only be making ~$7 a month for these boxes if added to an existing tivo subscription, there obviously isnt a whole lot of service cost subsidizing involved. They're not getting $75-100+ a month in service fees.
That these guys are dropping the product should make a big statement to directv management. Here you have a retailer who can sell computers, cell phones, tivo's, and all other manner of consumer electronics products loaded with contracts, support issues, and enormous complexity and be successful at it and make a profit.
But they cant successfully sell a set top box for a tv and they're either so unsuccessful at it or unprofitable in selling them that they're getting out of the business.
Bestbuy is one thing, but Costco customers tend to be more affluent and intelligent than the average joe, according to their demographics and their employees tend to be a lot further up the retail food chain than most companies.
Directv has to make their sales and pricing models simpler and learn that sometimes its better to make the carrot longer than to continue adding larger sticks.
Is BB and Costco dropping selling the recvrs, or is D* pulling them out of the stores to have complete control ?
Dish did the same thing awhile back.
IF you all find these boxes now only cost $200 to build, or less ....
And they are charging $ 199 or there abouts for most ....
Shouldn't they be owned by the sub ?
Originally they were charging about $850 to "buy one" ...
I can understand with the difference in cost, but none of us know how much they really spend to build them.
Also there is no laws that prevent them from making whatever profit amount that they can...
Both BextBuy and CostCo have already removed DirecTV receivers from their websites, and redirect to DirecTV's site for receiver orders.
I was told they were going to sell them until there was no more stock left but best buy down here ( I have 3 near me ) all said they got orders to pull recievers and they are shipping them back. Which is different then what I heard.
Any chance of posting that memo (deleting internal specific stuff that may not pertain to us here on SG, of course)?
So only Bestbuy and Costco are affected.?
Does DIRECTV think that offering receivers through inventory clearance and drop-ship operations is a more reliable way of getting the point about leasing across?Title says it all, why because customers cant read that it is a lease and not owned when they buy one from retail locations upgrades on equipment are to go through 1800-531-5000 ( national number )
Does DIRECTV think that offering receivers through inventory clearance and drop-ship operations is a more reliable way of getting the point about leasing across?
allowed to sell the equipment
One of the implied goals of the move was to improve customer awareness and education. I can't imagine how selling HR24s through an operation such as overstock.com (one of the most recent examples) or a "hands-off" drop ship storefront accomplishes this goal. For their part, overstock.com makes no mention either way of the HR24 being an outright purchase or a lease. I use overstock.com as an example as it is the first sales option listed if you google DIRECTV HR24.You would eliminate the retailer being involved, less hands involved, the better is probably thier thoughts.
found it.
From: <Censored>
Sent at:
Subject: <Censored>
Attachments:
The following message is for Customer Care.
What:
All consumer electronics (CE) retail partners – Best Buy and Costco – are no longer carrying DIRECTV receivers or upgrade equipment in store and online.
Note: New customers can still sign up for DIRECTV service through these CE retail partners.
When:
Effective immediately
Why:
To improve the overall customer experience for customers, DIRECTV has decided to no longer make upgrade receivers available at CE retail partners such as Best Buy and Costco.
Several years ago, DIRECTV moved to a lease-only business model for all CE retail partners. The reason behind this was to make our receivers more affordable for customers to acquire them. However, this has created several customer service issues and complaints as customers thought that the receivers they had paid for at a retail partner were owned and not leased; and they misunderstood the terms and conditions of the leased equipment, which includes a customer agreeing to a 12- or 24-month service agreement upon leasing a new receiver.
How:
· Customers who want to replace receivers or upgrade the equipment for their system will need to call DIRECTV at 1-800-DIRECTV or order online at directv.com.
· Customers will still be able to purchase non-receiver related equipment from these retailers (e.g., remote controls, multi-switches, cabling, etc.).
· New customers can still sign up for DIRECTV service at Best Buy and Costco.
Where:
<censored> will soon be updated to reflect this change.
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