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DirecTV will sell HR 44s to Solid Signal and Weaknees - but not me

Discussion in 'DIRECTV HD DVR/Receiver Discussion' started by FarNorth, May 29, 2013.

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  1. veryoldschool

    veryoldschool Lifetime Achiever Staff Member Super Moderator DBSTalk Club

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    You're right this far, but I'm not sure there are that many other applications for them either.

    I don't know this [http://www.broadcom.com/products/Satellite/Satellite-Set-Top-Box-Solutions/BCM7424] is what DirecTV uses, but it does look specifically targeted to SAT receivers.
     
  2. sregener

    sregener Godfather

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    Doesn't anyone remember the DTVPal DVR? $250 list price for a fully functional, 2-tuner DVR. And this was in 2009, ancient history in the computing world, and it was a product that was not subsidized by programming fees or contracts. Even the guide information was free. Yeah, it only had a 250GB hard drive, but prices have come down to the point where a 1TB would be cheaper now. I agree with the above claim that the satellite tuner is the only part that *has* to be unique to a DirecTV DVR. The rest can be done with standard equipment that is made in bulk. We're really struggling to come up with a $700 price tag for the DVR.

    A decade ago, the cost to acquire a single new customer was around $750. It's probably higher today. But that included all the advertising and installation costs, not just the equipment. And we have to include the fact that DirecTV, by leasing the receivers rather than selling them, can claim depreciation costs over time, which greatly reduces their tax burden, and subsequently, their real cost.
     
  3. carl6

    carl6 Moderator Staff Member DBSTalk Club

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    Keep in mind the hardware is not the only cost involved in the design, production and distribution of any item. You cannot limit the discussion to the cost of components and manufacturing cost.
     
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  4. wingrider01

    wingrider01 Hall Of Fame

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    Actually If you try to upgrade by paying the ETF on your current phone number, the number is canceled, paying the ETF terminates the agreement between you and the phone company and the number is released back into the number pool. Go ahead and use that method as long as you don't care to give up your cell number. The only way of keeping a cell number from a carrier is porting it to another carrier.

    There are two methods with ATT if you want to upgrade in the middle of your contract

    1. Pay full retail price for the new device
    2. If you qualify for a upgrade at a reduced cost plus the penalty charge, which is discounted price of the phone + 250.00 penalty payment, so for a 16GB IPhone 5 it would be 149.00 + 250.00 or 399.00
     
  5. Stuart Sweet

    Stuart Sweet The Shadow Knows!

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    I remember that product. It seems to have failed in the marketplace due to poor quality and lack of support.

    I think the one thing on which we can all agree is that we don't have our eyes on the numbers. What I can say that I know for sure is that the tuner chips, CPU, decoding/output chips, and other support chips are all relatively low volume pieces not found in regular PCs. That is sure to make them more expensive, and with relatively lower volumes each box carries a higher cost of engineering and maintenance.

    I just looked at the price of a mid-level iPhone 5, unlocked with no carrier subsidy. It's $749 and that's for a product with much higher volumes. I guess I'm having trouble understanding why a DIRECTV DVR can't cost at least $400 in parts, plus engineering costs. I could imagine it costing even more, actually. The world of "embedded" devices is very different from the world of general purpose PCs.
     
  6. Bill Broderick

    Bill Broderick Icon

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    I guess I'm missing something here. If you want to replace your HR-34 with an HR-44, you can just order one from SS or WK. When it arrives install the 44 in place of the 34, call DirecTV have them remove the 34 from your account and replace with the 44. When they send the recovery kit, send the 34 back to DirecTV.

    I have no idea where cancellation, ETF and resubscribe enters the situation.
     
  7. Bill Broderick

    Bill Broderick Icon

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    I didn't know that FiOS does this (even though I'm a FiOS Internet/phone customer). I think that this is a great idea.
     
  8. Diana C

    Diana C Hall Of Fame DBSTalk Club

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    I respectfully disagree. The changing of a "few components" on a circuit board vastly increases its cost. In fact, the cost of having a board built on an automated assembly line is sufficiently low, and cost of refitting an existing board so high, that is often more cost effective to build an entirely new power supply board even if the change required would be a single resistor.

    This is the point. Sure, the sum cost of all the electronic parts inside a DVR is probably around $100 (exclusive of smartcard, hard drive and satellite tuner chips).. But they need to be assembled in just the right way to support the software and functionality of the design. The way assembly lines work is that the big cost is in setting them up. The longer they run and the more units produced, the lower the per unit overhead of the setup. The assembly lines don't run long enough to make the per unit cost on DVRs very low.

    I'd suggest the analogy of AV receivers. These units are electronically simpler than DVRs, and about equal to a basic satellite receiver. They are also manufactured in about equal numbers on a brand and model basis. These devices cost an average of around $400, with many well over $800. Why should satellite receivers be different?
     
  9. tonyd79

    tonyd79 Hall Of Fame

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    What DirecTV sees SS and WK as is an extension of their distribution system. They are a retailer for DirecTV products, not a customer. Comparing the relationship between DirecTV and them versus DirecTV and you is apples and oranges.
     
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  10. tonyd79

    tonyd79 Hall Of Fame

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    I can see that it does not instill loyalty but you are kidding yourself if you think other providers are much better at consistency or inventory management.

    I have dealt with both comcast and fios in recent years (fios is ongoing now) and they treat DVRs the same way DirecTV does. So does Comcast. They also both are hit and miss on what price and what deals you get. In fact, fios is notorious for quoting a price that does not match your bill.

    None of them inspire loyalty on all aspects. You just pick the best one for your needs. For me, that is DirecTV by far. For you it might be someone else.
     
  11. FarNorth

    FarNorth Godfather

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    I guess I'm missing the point. Every unit that SS and WK sell goes to an existing DTV customer, right? So how does that help DTV? Let's assume that SS/WK buy their units for $280 and then sell them to me at $350 - why doesn't DTV simply 'eliminate the middle man' and sell one to me for $350 or, better yet, $280?

    It would take them all of three seconds:

    We market our units at various price levels and with various incentives in place. For our purposes of inventory control, we consider many different units and models to be functionally the same and are priced accordingly. However, we understand that a very small number of our consumers demand a specific model or type of receiver and for those customers, we have established a separate pricing tier:

    HR 24 $229
    HR 34 $249
    HR 44 $299

    What's wrong with that plan?
     
  12. CCarncross

    CCarncross Hall Of Fame

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    You're not missing anything at all as far as I can see....It is that simple, but its become this huge cumbersome ordeal or so many would like us to think. The caveat is they want the free upgrade to come from Directv, they dont want to have to pay any money for it. They want their cake and to eat it too. If I had a 34, and HAD TO HAVE a 44, thats exactly what I would do because I realize thats the price you pay to get one currently.
     
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  13. slice1900

    slice1900 Well-Known Member

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    That would be applicable to any set top box, for cable or IPTV, not just satellite. Genies might use this, Hoppers might use this, various high end cable / FIOS DVRs or Tivos might use this. They all have similar needs, and there's nothing specific for satellite in this. That would be a separate satellite tuner chip, the one thing that Directv receivers include that only Directv receivers would need. There's no reason several generations of Directv receivers wouldn't use the same tuner chip design, probably made by more than one manufacturer, to reduce risk and add some price competition. I wouldn't be surprised to find identical tuner chips in an HR21 and an HR23, even if they were made by different manufacturers, for instance.

    A SoC (System on a Chip, so called because it includes most of the functionality that Intel CPUs don't include but are instead provided by other chips on the motherboard in a typical PC - though Intel is slowly moving along this path for PC CPUs) like this is a chip that's basically built out of various building blocks. Not literally, the chip is a single unit, I'm talking about doing the design that is sent to a foundry (generally TSMC, pretty much everything electronic you buy has multiple chips made in TSMC's fabs)

    Broadcom will put together different models that offer different levels of performance for CPU, graphics, and other add-ons on the higher end but they're all built from the same building blocks. The parts of the SoC are only designed once, and often these parts of the design are purchased/licensed from other vendors. Then they get reused across an entire product line. In the cell phone market they refresh them yearly, in this market probably every two years.

    The fact this is designed in 40nm shows that cost was a more important design target than performance, because that's an older manufacturing process. The newest process always costs the most, older processes cost less (even though they produce bigger chips, the actual silicon itself isn't that expensive, it is the amortization of the cost of all the fab equipment, which runs into the billions for each smaller semiconductor manufacturing process - for a single fab!)

    All the current high end cell phones are using chips manufactured in 28nm, and in about six months you'll start seeing some using chips manufactured in 20nm - about four years ahead of the 40nm process this uses. The SoC used in an iPhone 5 or Galaxy S4 cost much more to make than this Broadcom SoC, because Apple and Samsung are paying for the heavy initial depreciation of the fabs making them. Despite this, estimates are that Samsung pays only $20 for the SoC in the US version of the GS4, $28 for the SoC used in the international version (which they make themselves) Broadcom likely makes this SoC for less than $10/ea.

    Obviously there are multiple manufacturers of such SoCs available, but they're all in competition with each other, so the manufacturers of Directv's receivers would be able to engage them in a competitive bidding process. For vendors like Pace who make many set top boxes, not just for Directv, they may end up using the same thing in a Genie as they would in higher end DVRs they're making for cable companies, and use a less powerful one in a H25 or client, along with standard cable receivers.
     
  14. slice1900

    slice1900 Well-Known Member

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    You're assuming they're being built on an automated assembly line. If they're assembled in China, that may not be the case. Why do you think most cell phones are hand assembled in China? With the tiny tolerances and millions of units involved, you'd think it is a perfect job for robots. Humans are just cheaper.

    If it cost that much to change the power supply a little bit they just wouldn't. They'd use the same one they used in another product, which might produce a bit more power than they need and thereby lose a little efficiency, or if they make a poor engineering choice might produce a bit less power than they need (hello, H20-600!)

    I know a lot about the chip side of the picture, less about the board level manufacturing. So if you know this end of the business I'll defer to your expertise. I certainly don't know the cost of retooling a production line at various levels of automation, only that doing it when it is using mostly human labor isn't very expensive at all.

    I also know little about AV receivers, or why they might cost what they do. I do know that audiophiles and videophiles are the often the suckers PT Barnum was talking about. I've got a friend with an EE who believes some amazing things about the money he's spent on his audio system that defies the laws of physics he was taught in school. There's a reason why there are so many tiny boutique firms making this stuff - because when the buyers willingly suspend their knowledge of the lack of physics, economic laws that dictate that sales price should bear at least some relationship to manufacturing cost are likewise suspended :)
     
  15. Diana C

    Diana C Hall Of Fame DBSTalk Club

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    It helps them (and they are willing to give up some profit) because Solid Signal and Weaknees are willing to do specific model inventory, ordering and shipping for them (and in the case of Weaknees, provide support for the units they upgrade with larger drives). These two retailers ARE DirecTV's way of catering to users that absolutely, positively, have to own a specific model of receiver or DVR. DirecTV has made the determination that it is cheaper for them to have these 3rd parties provide this service than it is to implement it themselves.

    Simply put, they have outsourced the "specific model" delivery process.
     
  16. lugnutathome

    lugnutathome Hall Of Fame

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    Since Weaknees does open the units and upgrade the hard drives and they become the support institution for these. Are they still leased? Technically ownwed by WK and we lease from them? Or is it an owned receiver once you have bought it?

    Don "always wanted to ask that" Bolton

     
  17. Diana C

    Diana C Hall Of Fame DBSTalk Club

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    All valid points. As Stuart has mentioned, we can guess and speculate all we want, but the truth is none of us really know all the cost factors involved. As has been suggested, there are additional costs beyond the hardware itself - like design, software development and maintenance, distribution, etc.

    AFAIK, they are still leased, and must be returned to DirecTV if you cancel your subscription. I'm not sure what DirecTV does with the 2 or 3 TB units.

    From the Weaknees web page:

    "Please note that DirecTV generally considers all new equipment activated after March, 2006 to be leased equipment. DirecTV will typically only allow one HR34 to be active per account."

    And this:

    "NOTES AND TERMS FOR ALL DIRECTV DVR PURCHASES:
    • WeaKnees will not accept returns on any DIRECTV DVRs that have been activated with DIRECTV. No exceptions. HR20/HR21/HR22/HR24 DIRECTV DVRs cannot be returned or exchanged once activated.
    • All warranty/returns/service for upgraded units (which is any unit that has more recording capacity than it had when it left the manufacturing facility) must be through Weaknees.com. Failure to contact Weaknees.com for service will result in a loss of all recording capacity that Weaknees.com added to the standard 30-hour unit. Warranty/service for unmodified units must be done through the manufacturer."
     
  18. bananfish

    bananfish Mentor

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    Actually, for me, it's DirecTV too, mostly because I'm a Season Ticket guy, but also because I have generally been satisfied with their service and offerings. I have had a grand total of maybe 35 minutes in my 12 years with them where the service has been unavailable due to rain fade or otherwise. I have Comcast as my ISP, and consequently could get TV service through them at a significantly cheaper rate because of bundling, but I continue with DirecTV.

    Whether competitors are just as bad is irrelevant. Just because all the players in an industry do things one way does not mean it is the best way to do business, and certainly does not mean I need to be satisfied with that way of doing business. Consumer-unfriendly business practices are replete in industries where there is money to be made through obfuscation and three card monte type dealing - mortgages, automobiles, mattresses, airline tickets, cell phones, etc. Unfortunately, this is one of them.

    DirecTV has an opportunity to engender my loyalty by allowing me to purchase equipment that they carry that I know would better satisfy me than the alternative, and I am willing to pay a reasonable premium for that equipment. DirecTV will not allow me to do so. I can be sure to get that equipment only by going to a third party, paying an enormous premium, and risking that DirecTV will replace that equipment with inferior equipment if something goes wrong with the equipment that I "lease" from them. I am not going to be satisfied with that state of affairs no matter how many people on this forum tell me I should be or that I am kidding myself.
     
  19. Stuart Sweet

    Stuart Sweet The Shadow Knows!

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    I see your point but it's more accurate to say that the third party will not honor the discounted rate offered by DIRECTV CSRs than it is to say that there is a huge premium to be paid.
     
  20. Bill Broderick

    Bill Broderick Icon

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    That's really where this issue stems from. If DirecTV weren't giving away free or discounted equipment, there wouldn't be a problem. People who wanted specific equipment could get it from retailers and people who didn't really care could get it directly from DirecTV. It wouldn't matter where you got it, the price would be consistent.

    That doesn't solve the warranty replacement issue. But that could be solved by allowing people to get thier warranty replacements via the 3rd party retailers and issuing an account credit.

    Personally, I like the fact that, as a good customer, DirecTV is willing to give me discounted equipment, and accept the fact that I might not get exactly what I want. When I want specific equipment, I'm willing to work within thier system in order to optimize my chances for getting what I want (such as waiting for the HR-44 to become widely available in my area before ordering).
     
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