Why are 2.5G switches from known TW brands so expensive?

[kulibaba]

2.5G switches from well known Taiwanese companies like D-Link easily cost 100USD or more.
Their 1G switches however are in the 20USD range.

Is there any reasonable explanation why there's such a steep price step?
The Realtek chips used in those can't cost that much more, as those 30-50USD switches from CN that flood the market since about a year are showing.
I mean I could see a 20USD markup for the higher costs of R&D and marketing in TW, but not 3-4x the price.

I don't get it - or am I missing something?

 

[Tech Junky]

Paying for the warranty.

When I collapsed several devices into a single box I just used a quad port nic instead of a switch. Initially it was two gig cards and then I switched to a quad 5ge nic due to the max speed for my drives at the time. Since switching from spinners the speed goes beyond what makes sense financially to get a link between the server and laptop.

However, the 5ge nic still runs about $200. Still cheaper than a switch at the same speed. My next step would be 10ge for WiFi 7 uplink and that's $100 for an x1 slot at Gen 4. Unless of course I can get the internal M2 card working at acceptable speeds and forego the external AP need.

 

[kulibaba]

> Paying for the warranty.

They need to do that for their super cheap 1G range as well.
And the two defects I had on SOHO 1G switches were both power supply related, which is usally the cheapest part.
Both were replaced under warranty (for switch that cost 20USD).

 

[klui]

A portion of the increase is most likely due to getting the device certified by a safety validator like CSA, TUV, and UL. The vendor would need to validate the device and conform to requirements set by each country where it wants to sell. The red tape necessary doesn't come cheap.

I don't think these inexpensive switches from Amazon, AliExpress, etc. have any certification. They may pass, they may not. Looking at some of the disassembled wall warts from China on DiodeGoneWild make me cringe. Even if a mark exists on the device it would be wise to double check and confirm the certification number. Even ODM switches from the likes of Celestica are UL-listed.

 

[kulibaba]

Looking at some of the disassembled wall warts from China on DiodeGoneWild make me cringe.

That's the main reason I hesitate to buy one of those cheap CN switches - don't want to have a fire in my home.
In case I get one I'll definitely buy a quality 12V power supply to replace the included one.

A portion of the increase is most likely due to getting the device certified by a safety validator like CSA, TUV, and UL. The vendor would need to validate the device and conform to requirements set by each country where it wants to sell. The red tape necessary doesn't come cheap.

The D-Link DMS-105 is advertised as "NDAA Compliant" - that might cause a certain price increase, but not triple or quadruple it.
For example the D-Link DGS-1005P (5-port 1G with 60W PoE+) is also NDAA compliant, but costs only ~60USD.

CSA, TUV, and UL certifications are also relatively cheap for power supplies produced on a large scale like 12V 1A.

 

[pimposh]

volume of 1Gb cheapo unmanaged products is ridicolously massive comparing to 1Gb+ and market won’t accept anything else while less market penetrating solutions are by nature almost in all cases generating more profit thus pricing of 2,5gb is more than 2,5x 1Gb…

 

[kulibaba]

volume of 1Gb cheapo unmanaged products is ridicolously massive comparing to 1Gb+ and market won’t accept anything else while less market penetrating solutions are by nature almost in all cases generating more profit thus pricing of 2,5gb is more than 2,5x 1Gb…

Sure, but that still doesn't explain why CN rebranders of the taiwanese Realtek reference designs are able to push switches for 1/3 of the pricing by TW brands into the market.

 

[nexox]

It's because running a real company with engineering, marketing, support, documentation, QA, lawyers, accountants, all kinds of paperwork, and much more costs money. Gigabit switches haven't changed much in a decade so they don't cost as much in any of those areas and there's plenty of competition, but that same competition seems to think that a 2.5G switch costs $100 (or whatever, not using it myself, so I'm not current on pricing.)

 

[nasbdh9]

Compliance certification will not increase the selling price too much. The biggest impact of compliance certification is the product launch time (delayed by 3 months or even more than 1 year, depending on the product and the company's R&D level).

 

[nasbdh9]

these switches using Realtek do not actually require any R&D. I personally call these product designs "Linking Game" because the PCB design does not actually change in any fundamental way, and the models with management also use the SDK from Realtek to change the webui or even directly provide it to the market as is.

The only thing that affects the price is how much profit the company selling the equipment needs to make from the product.

 

[nasbdh9]

The reason why these Chinese-made 2.5G/5G/10G switches are so cheap is that the Chinese companies that sell these switches do not need any R&D capabilities. They just buy the manufactured PCBs and shells, assemble them and then sell them, and the companies that sell these "pre-finished products" do not need to consider how to sell the final products.

Assuming the cost of manufacturing a switch PCB and shell is $25, the price sold to the sales company may be $30 or even lower.

The sales company will only make a profit of $1 to $10 from selling this product, because the price reaches the price of "big brand" products in the market, people will naturally not buy these.

 

[Shonk]

Its this..

 

[Patrick]

Just a quick point here on switch warranties, especially on the unmanaged side. Switches are not 1% AFR devices and certainly not 0.5% AFR devices. I know companies like Netgear have an extremely low failure rate.

On the unmanaged side, if you are paying more than, say, a 1-5% premium for a warranty, then you need to know you are paying an enormous premium.

If big brands are more than 2x the price, you are much better off getting a cheap switch, sticking the difference in price in a liquid investment (even a money market account), and then just getting another one if the original fails.

Managed is different since you would expect more frequent and better firmware upgrades from larger brands. That takes ongoing engineering effort but provides new value over the life of the product.

 

[i386]

That takes ongoing engineering effort but provides new value over the life of the product.

Or (possibly) lowers the value ._.

 

[Patrick]

Or (possibly) lowers the value ._.

Fair.