Responding to this from the On/Off thread as we merged both switches to this one.
Great questions and this is a tough one to answer in black/white terms as there’s a lot of moving pieces, but I’ll try my best.
Generally speaking, ZigBee is cheaper to manufacturer simply due to the chipset being a lot less expensive. This is due to the fact that Silicon Labs owned ZigBee and Sigma Designs owned Z-Wave. Silicon allowed multiple manufacturers to produce the ZigBee chips, whereas Sigma only allowed one causing the prices to be much higher. Now that Silicon owns Z-Wave, they’ve opened it up to multiple manufacturers. However, for some reason it seems like the pricing is still way higher. Couple that with the poor forecasting, there is a severe Z-Wave chip shortage now, causing a, “spot market” (or as we call it over here, the, “black market”) where you can purchase chips and raw materials for 2-3x the cost to get things faster.
Right now ZigBee is much cheaper, but hopefully as things stabilize, Z-Wave won’t be as expensive.
So, that’s one aspect to consider when setting the price-point.
The other is through the marketing lens and what consumers want. This is where it gets to be complex. What features do people want and what price are they willing to pay for it.
The ZigBee switches will essentially be our Gen 3 switches in which we’re adding features as these are going to be directed at mass market, in which there is a lot more competition. We’ll never win the pricing war against Chinese companies, so what we have to do is set our branding to be a premium offer. To do this, we can’t be all smoke and mirrors, but rather prove we offer more as we charge more. To do this, we’re trying to solve a ton of problems in the market:
- Smart Home is confusing = we’ll (hopefully) provide a great user experience
- Installation is confusing = we’ll make it easier to install your switches and that includes allowing it to work in many different scenarios (neutral, non-neutral, etc) with many different load types. We want to make it so that people don’t even need to think about it and the process will be so seamless, it will make installation of a lesser expensive switch seem like a hassle
- Sexy aesthetics = I’m a marketing guy, what can I say lol
In order to do these things, it takes more expensive parts and so our price point will likely be around the same as Z-Wave, possibly a little less.
This brings up the question – why do you sell Z-Wave then?
This is one we’re wrestling with internally – and we’ve landed on the strategy of selling Z-Wave to security companies who require the security that Z-Wave offers and then if the home automation enthusiasts want Z-Wave, they can certainly have them.
However, our focus from a consumer standpoint is going to be ZigBee/CHIP/Matter as that’s where the big dogs are playing and where we can fill more of the gaps in the industry.
Long winded way of saying - price point will likely remain the same as we’re adding more features that will likely offset any cost savings by switching to ZigBee.
Good news, and I can’t spill the beans yet, but these should run locally.
That’s a great point that I hadn’t thought of, thanks for sharing!