This $9 computer could change the economics of building hardware

The $9 chip driving a browser.

Today in a garage in Oakland, California, a company that could pave the way for a new generation of hardware startups is being built. Much like William Hewlett and David Packard started Hewlett-Packard out of their garage in Palo Alto, a building that would become the nexus of Silicon Valley, a group of entrepreneurs in that Oakland garage have built a $9 computer called Chip that could end up reducing the cost of building smart devices to less than $100 per gadget.

Dave Rauchwerk, CEO of Next Thing Co. which is the company behind Chip, says the idea of building Chip came to the company after it built a hackable camera that was designed to take GIFs—the looping images that litter the web. The camera cost about $250, and was built using a Raspberry Pi—an open-source Linux computer that cost about $35. But the $250 camera price tag was too expensive for something designed to be a fun toy for most.

Next Thing Co.
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To bring the price of the camera down Rauchwerk knew he had to get the cost of computing down, so he decided to work on that problem. With the help of Chinese chip company Allwinner Technology and the accelerator program (formerly known as HAXLR8R) he built the Chip board, a 1 gigahertz processor using an ARM core that contains 512 megabytes of RAM and 4 Gigabytes of storage. For those whose eyes just glazed over, this is equivalent to the computing power of a low-end smart phone. It’s plenty to run low-end games or a smart hub or connected device. The chip can connect to a monitor and also comes with both Wi-Fi and Bluetooth connectivity included on the board.

And that’s what makes this chip so impressive. At $9 someone can buy this computer and build a credible connected product on top of it, and then sell the end device for about $100 or so at retail. When someone builds a product on top of a Raspberry Pi for example, they are stuck building on top of something relatively expensive, which means the end product is going to cost about $200 or more at retail. And as Rauchwerk explains, “That puts it out of the range of an impulse buy.”

So far the Chip is a Kickstarter effort, with Allwinner and Next Thing Co. producing it in batches of 5,000 computers. Allwinner is a credible manufacturers of silicon, producing the chips for many of the Android tablets of the last few years. Rauchwerk says that right now, the focus is on getting developers interested in using the board, not in selling massive quantities of the chip, but he’s confident that Allwinner can handle the demand. The Kickstarter, which is only a few days old, has already hit $701,873 surpassing its $50,000 goal with almost 14,000 backers.

The computer runs an open source software package consisting of LibreOffice and the Chromium browser, but developers can port other open source software platforms to Chip if they want. Chip will ship its first batch in September of this year and its second in May 2016. If it’s a hit, expect to see a lot of really cheap connected devices flood the market about a year later.

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