Where does the price of Mudita Pure come from?

We want to thank all of you that follow and support Mudita. It shows us that our mission to promote a conscious use of technology, is shared by many people all over the world. People who care enough to impact the development of a more fair and healthy relationship with technology. People that want to change the status quo. Without all of your support, we wouldn’t have made it this far.

While our backers on Kickstarter can still pre-order Mudita Pure for $221-$295, the suggested retail price after the launch will be $369. 

Where does this price come from?

The most concise answer is that as a new technology company we aim to deliver a high-quality device with a proprietary OS and technology built with health and wellbeing in mind. 

Here’s a short breakdown of major costs that make up the final price:

1. Components and production will be about $180 per device.

On top of that we need to allocate costs related to:

2. Research & development - estimated at $3,5M in total 

3. Design: 

• 18 months, 

• 11 design studios, 

• 40 proposals. 

4. The team that will make it happen

Over a period of 5 years, our company has grown from 2 people working on R&D, to over 40 in different teams.

5. Taxes and fees:

All of our prices include sales tax/VAT and cover payment fees.

• Tax rates: depending on the country/state, up to 10% in the US and up to 27% for Europe.

• Payment processors c. 3% and crowdfunding platforms 5%.

We encourage you to keep reading, because short answers are never enough as we’ve seen in the comments and questions from our supporters. We will elaborate on each of the bullet points from the above section in the continuing paragraphs. We hope that it will help you understand more thoroughly the cost it takes to produce Mudita Pure for a new technology company with low production volumes. 

1. Components and production

We chose to design, develop and assemble Mudita Pure in the European Union (EU). The EU has developed social and environmental regulations which help to prevent the abuse of workers and the environment. If you compare the average wage on the production line to low-cost sourcing countries, it significantly changes the final price. We understand that not everybody can afford our premium products but we strongly believe that people vote with their wallets for the world they want to live in. 

We made a conscious decision to make a premium device built with the best components. Many of our choices raised the manufacturing costs but left us satisfied with the final result. To achieve our goals, such as less energy consumption, compatibility with the E Ink display, highest quality components and an ultralow SAR value, we decided to build our own PCBA (Printed Circuit Board Assembly) instead of using a pre-made one, a common practice among phone producers. We hand picked every single component and have developed a proprietary operating system to ensure the best experience. 

$180 - This is the cost of the components and the production per device, (Bill of Materials, assembly, casing, USB-C cable, packaging).

This cost does not include all other complex elements, which we describe in the next part of the document.

Examples of premium/non-standard components: 

• Global GSM module - this is something uncommon in the classic phone market, but in this case we decided to go against the mainstream and chose not to use the cheapest modem available. We equipped Pure with a global GSM module, certified with FCC, PTCRB, GCF. It is compatible with AT&T, Verizon, T-Mobile and Sprint. It runs on 4G/LTE, 3G, and even 2G network (still important for many users). 

• E Ink display and custom frontlight - instead of a standard screen, we went for a more eye-friendly solution with an analog feel and high specs, therefore we chose a new, high density E Ink display (2.84’’ 16 grayscale, 600x480px).

• Mudita patent-based antenna - our own research on SAR resulted in a unique, custom-created low SAR antenna. We patented the solution in the US and EU and based our custom-developed antenna on it. 

• Loudspeaker - high quality 1W speaker from Harman.

Other components include: 

• Microcontroller (Arm Cortex-M7 600 MHz)

• Memory SDRAM (16MB) & eMMC flash (16 GB) 

• Battery 1900 mAh

• Bluetooth module 4.2

• 2 Sim card slots, 

• Flashlight,

• Ear speaker, 

• Microphone, 

• Stereo codec, 

• Audio jack connector, 

• Vibration motor, 

• Slider sensors, 

• Keypad backlight LED

• Lights driver,

• Ambient light sensor,

• Connectors:

• • USB C 

  • RF connector

  • Battery connector

  • E-ink connector 

• Buttons:

• • Keypad 

  • Volume 

  • Mode slider

and up to 300 passive components!

“We are a small, boutique company, getting off the ground. We cannot compete against huge tech companies that can afford to leverage their market position to push the entire supply chain to get the most for the least. In a nutshell, our price is driven by the actual costs to make it happen for a company with low production volume.”

2. Research & Development

The R&D program already started in 2013 and required an investment of $3M and an additional $500K from NCBR (National Center of Research and Development).

• Ultralow SAR - our unique feature which required a thorough R&D process spanning over five years, including hundreds of hours of lab testing in various institutions to make sure we minimize the SAR value without sacrificing the signal strength. 

• Patents and trademarks - all our research and efforts on the SAR values led to a Mudita patent-based solution, which can now be used in our devices. On top of the patents, we also made sure to secure the brand and its users in terms of trademarks on a global level (it usually takes months to register patent or trademark with success).

• Certifications and licenses - not all manufacturers respect these rules, but we certainly do. We want to comply with all legal and technical requirements with respect to the phone industry (e.g. certification of GSM modem, carriers, battery safety, etc.)

• Development of the proprietary operating system - we could have easily taken a stock operating system and saved ourselves months of work. We made a conscious decision to build a custom OS in-house to have full control over what’s happening under the hood. We all hear about data leaks, security issues and user tracking - we wanted to protect our users from those issues. 

3. Design

It is incredibly difficult to design a simple product that is functional,  and at the same time is very aesthetically pleasing and unique in its look.

It took us 18 months, 11 design studios, and 40 proposals to finalize our design. 

Conceptual design is always far from the end product and requires a lot of mechanical adjustments.  

4. The team that will make it happen

We gathered over 40 people  to make sure every single aspect of the phone is taken care of - electronics, mechanical and embedded systems engineers, developers, designers, marketing and customer support. We wanted to attract the best people and create good working conditions, we don't believe that saving on employees is a good, long term strategy.

5. Taxes and fees

All of our prices include sales tax/VAT and cover payment fees.

• Tax rates: Depending on the country/state - up to 10% in the US and up to 27% for Europe.

• Payment processors c. 3% and crowdfunding platforms 5%.

On top of that are costs related to sales and marketing. We try to keep our marketing budget at a reasonable level, but as a new company with a new product we needed to invest money to reach our potential users. 

We believe that we live in a world where we look at products mainly from just one angle - the pricing.  Expecting that everything should be cheaper and cheaper. Which leads to compromises regarding respect for employees, the environment, and the quality of the product itself. We designed Mudita Pure to last for a long time, and we believe that, thanks to its simplicity, it doesn’t need to be replaced by a newer model as often. 

We chose a Kickstarter campaign to increase our reach and to show that people are already actively looking for mobile phones that aim to take care of their health and well-being. Mudita’s investors are thinking about the company in the long term and aim to start as they mean to go on.

Mudita’s team is already working on different solutions with the same core values.

At this point, we want to thank everybody who has supported our mission to promote a more conscious use of technology. By purchasing our products and spreading the message across the globe you are helping us develop more fair and healthy technology.

We are open to questions and suggestions, please feel free to ask us, privately by email via hello@mudita.com or publicly on our discussion board: http://forum.mudita.com 

Team Mudita