Sling Media Slingbox Teardown

Main Features

The Slingbox is a novel product that allows a user, via an ethernet and an optional internet connection to "watch tv from anywhere'. The device itself is essentially a small tuner and an audio/video decoder chip with an Ethernet interface to allow the device to convert video and audio signals to transmissible MPEG data. You can also "control" an A/V device such as a DVR remotely and view the output, again via Ethernet or internet connection. The hardware isn't all that complex or expensive to produce; but it's the total package, a combination of dedicated hardware and a specialized software interface that makes the product so functional.

Marketing / Positioning

Overview

Launched in June 2005 and winner of several awards including Time Magazine's "Inventions of the Year," the Slingbox is a device to transmit a single video stream from a home based source, e.g., set-top box, digital video recorder (DVR), across the internet to a remotely located PC. This functionality is generically called "place shifting" similar to how TIVO and other DVRs enable "time shifting" of content. Other well-known entrants in the emerging "place shifting" market include BeyondTV and Orb Networks, both software solutions that enable remote access to PC based media.

Two key partners in developing Slingbox were Microsoft, which likely utilized the opportunity to gain more experience with IPTV, and Texas Instruments, which probably used the project to further their recent expansion into digital video, i.e., the DaVinci platform. Future versions of the Slingbox may also use SoC controllers from Philips.

The Slingbox is a unique product, although in fact, one could probably achieve similar functionality by using a low cost PCI video tuner / video capture board a software interface, such as the aforementioned BeyondTV and Orb Networks software solutions, there is a user advantage to having a dedicated hardware interface, which ultimately should provide more fluid control and streaming.

The Slingbox retails for about $250 currently, and, per our analysis, costs about $84 in materials and manufacturing (see cost notes section for details).

Target Market(s) - "The Place Shifting Trend'

The target market here is fuzzy, and is but apparently the founder of Sling Media came up with the idea, as part of an obsession with catching certain sporting events, and wanted a way to keep up with them remotely while traveling. Perhaps it's because our teardown team doesn't share this obsession, but we have asked ourselves the question many times who really needs or wants this, and is willing to invest $250 to watch TV remotely? It's certainly novel, but this product is probably the domain of techies and early adopters (who will be the only ones knowledgeable enough in basic home networking skills, and have the patience to troubleshoot this system until it is functional) with enough disposable income to find this novelty indispensable.

Competition

As of October 2005, Sony has released a similar product called "Location Free'. Furthermore - BeyondTV and Orb Networks both provide software solutions that enable remote access to PC based media.

Released

June 2005.

Availability & Pricing

Initially available only at BestBuy and CompUSA, the Slingbox is now available in 14 major retailers throughout the US. The current device retails for $249 though Wal-Mart has discounted as low as $228. Future versions under development, and likely announced at the upcoming Consumer Electronics Show (CES) will extend functionality to PDAs and smart phones for remote viewing and control.

Volume Estimations

We are estimating a total production volume of 100K units over a 1 year product lifecycle. This may be conservative, as Sling have several large retail outlets for their product. ISuppli uses production volume level assumptions, for the purposes of teardowns, are used primarily for amortization of various fixed costs and up front costs, such as tooling, or test set-ups.

Functional / Performance Testing

We rarely perform much in the way of performance / road testing here at iSuppli, as we tend to focus our analysis on the hardware and manufacturing cost analysis solely, but the uniqueness of this product prompted me to go to great lengths to see how well this device functioned. In summary, a defective Belkin wireless router, and IP address rationing (Thanks Verizon) turned this process into an elongated and arduous task. In the end, it must have taken about 6 hours of fiddling to make this system work, most of which was largely due (in all fairness to the manufacturer) to factors outside of Sling Media's fault - but was a chore nonetheless. When I was finally able to access a video signal via my internal home Ethernet network, the picture was fluid, and the remote controlling of the analog tuner quite rapid. IR control of my DVD player was attempted to test the remote IR control - but since my off-brand model was not on the list, it was impossible to find the right controller code. Had I been willing to individually test every possible code combination, I might have succeeded.

However, once I used an external internet connection to access the Slingbox, performance was clearly degraded. Overall, if one is expecting to see clear, crisp, full-screen pictures, you will be disappointed by the MPEG artifacts and overall poor picture quality (regardless of using it on an local Ethernet network, or via the internet). The Slingbox looked really great in a small screen mode, but marginal, and akin to online streaming video when in full screen mode. Perhaps there were some settings I could have adjusted to improve picture quality, however, based on my experience the Slingbox is no replacement for a second TV in a house, (which would probably be cheaper). However for watching your recorded episodes of the "big game" from the road - there is no replacement.

Cost Notes

It is important to underscore that iSuppli teardowns focus on hardware, and in this analysis our cost analysis is confined to the Slingbox unit and power supply solely. None of the other box contents (cables, packaging and literature, etc.) were accounted for in this analysis. The analysis represents the sum of materials costs with basic manufacturing and processing included, but our cost analysis stops where the box drops off the end of the assembly line**.

Furthermore, Slingbox doesn't have the kind of volumes other products might have (which we have accounted for in our component unit costs), and they also have a significant amount of up front costs as well as software, design and other non-recurring engineering (NRE) charges to recoup being a start-up company so it stands to reason that in addition to the $82 analysis we provide here, that there are significant investments to recoup. One should not conclude that margins are very high on this product based on the ratio of material costs to retail selling price.

Main Cost Drivers (Representing 67% of total materials costs):

Texas Instruments - Video/Imaging DSP ~$22

Philips - Analog TV Video/Stereo Decoder~$7

Philips - Tuner / Front End Module - Tuner~$6

Micron - SDRAM - 128Mb ~$6

Spansion - Flash - 64Mb ~$4

Power Supply~$5

Subtotal Main Cost Drivers~$50

Total Materials Costs~$75

Manufacturing and Materials** ~$84

* - Direct materials costs only (manufacturing not considered on this reference cost).

** - The total materials and manufacturing costs reported in this analysis reflect only the direct materials cost (from component vendors and assorted EMS providers), manufacturing and test. Not included in this analysis are costs above and beyond the manufacture of the core device itself - cost of software, licensing fees (system level), shipping, logistics, marketing and other channel costs including not only the OEM's margin, but that of other resellers. Our cost analysis is meant to focus on those costs incurred in the manufacture of the core device, as well as the power supply.

Manufacturing Notes

Country of Origin / EMS provider

This device is marked as being manufactured in Indonesia, per the label on the unit. We assumed this to apply to end unit assembly and printed circuit board population. We are assuming that this country of origin does not apply to the manufacture of custom components, where we assumed that such components were made in China (mechanical components - plastics, metals, and other).

The power supply was also marked (as most are these days) Made in China from Hon-Kwang.

The EMS provider is not known to us.

Design for Manufacturing / Complexity

Calculation of manufacturing costs tends to correlate directly to the inherent complexity of a device. We calculate manufacturing costs from the ground-up by separating all components and sub-systems into two categories - those components which are hand-assembled or inserted, and those which are automatically inserted in a "pick and place" manufacturing environment. Typically most electronic components on PCBs are "auto" inserted, and typically most final assembly of products involves majoritarily "hand" assembled products. We categorize every component and system in this way in our spreadsheet BOM analysis.

Then, depending on the type of component, we either allocate a line item per component "auto" insertion cost (computer modeled), or estimate a cycle time (in seconds) per component for the hand assembly or insertion of that component or system into the next level of assembly. Cycle times are estimated based on overall complexity, and the total of those cycle times is logically, therefore, also a direct function of the number of components being inserted.

Overall - the Slingbox is very simple beyond the components which are directly mounted to the main PCB. As a result hand, or final, assembly is very limited, straightforward, and low-cost to perform.

Design Notes - Key Components

Main PCB

A/V Processing and Front End

• Texas Instruments - TMS320DM641GNZ - DSP - Video/Imaging, Fixed Point
• Philips - SAA7173 - Analog TV Video/Stereo Decoder
• Philips - FQ1238 - Front End Module - Tuner

Memory

• Micron Technology - MT48LC4M32B2TG7 - SDRAM - 128Mb
• AMD - Spansion - S29JL064H90TAI00 - Flash - 64Mb

Other

• JRC - NJM2573 - Amplifier - 3-Ch Video, Low Voltage
• Samsung - S3C80F9 - Microcontroller - 8-Bit

Power Supply

• Hon-Kwang - HK-A112-A06 - Switching Power Supply