Tech teardown: How to make a $35 PC

The first personal computer named after a fruit — the Apple I — made its debut at the Homebrew Computer Club in Silicon Valley in 1976 and cost $666.66 at retail or around $3,000 in today’s money, representing a mark-up of a third on the cost of its basic parts.

The latest one — the Raspberry Pi 4 — cost just $35 when it went on sale last Monday, with a profit margin obviously far lower and capabilities way beyond those envisaged by Apple founders Steve Wozniak and Steve Jobs.

The increasing miniaturisation of computer parts, their mass production and the regular doubling of performance under Moore’s Law are well-known factors in reducing the price of PCs over the years while making them more powerful. But $35 for a multimedia consumer PC is around a tenth the price usually paid for a traditional home computer.

So how does a UK company inspired by the Apple, Tangerine and Apricot pioneers of early computing make that possible?

Eben Upton, Raspberry Pi co-founder, took me through the lessons learnt since he began in 2012 producing a bare-bones PC originally expected to sell in the tens of thousands to the education market and hobbyists, but one that he is now going to “get for my parents to replace their 10-year-old desktop PC”.

“We’re very happy to live on very, very thin margins, and make it up in volume,” he said. “We sold 6m last year and we really hope this one is going to give us a shot in the arm to get to a 10m-a-year run rate.”

To appeal to mass-market consumers for the first time, the fourth-generation model’s circuit board has chips that enable dual-band WiFi and Gigabit Ethernet connectivity, sockets for two ultra high-definition (4K) monitors, along with four USB ports for peripherals and external storage, and a Broadcom processor usually found in TV set-top boxes powering it all.

“Almost all of the cost you see on the circuit board is for the memory and the processor. The earlier Raspberry Pi had silicon that came from phones, but latterly we’ve turned to chips from set-top boxes for TVs,” said Mr Upton.

Appropriately, Raspberry Pi uses Sony as a contract manufacturer, based in an old Trinitron TV factory in Wales. It has resellers worldwide to supplement its single bricks-and-mortar store in Cambridge. It also keeps marketing costs to a minimum.

“I think we’ve done the right thing in investing in the product, such as spending 50 cents more for a better WiFi chip for 6m units rather than spending that $3m on an advertising budget,” said the chief executive.

Instead, Raspberry Pi is relying on social media and free media publicity, as well as “influencers” who can sway a new target market that includes mums.

They should be attracted by a Windows-like desktop interface, powered by the free Linux operating system, with the company expecting users to spend most of their time in a browser, using cloud services such as Google Drive and Gmail, rather than buying expensive software.

However, there is a considerable catch to what is billed as “the world’s lowest-cost multimedia PC”: its price can rise rapidly from the base $35 if you need extras and peripherals as well. Upgrading the memory from 1GB to 4GB is another $20 and even a Raspberry-coloured plastic casing and power supply are not included.

For $120, there is a “desktop kit” that includes the 4GB version, case, power supply, keyboard, mouse, microSD memory card with the operating system and HDMI cables to plug into existing monitors you might have, or a TV. That version is closer to the regular PCs that charge extra premiums for much more memory, generous storage, the latest processors and Windows installed.

Even here, Raspberry Pi has tried to provide value for money, designing its own $8 power supply it claims is much better quality than the cheap ones available from China, as well as creating an attractive $17 keyboard that includes a USB hub.

And it can always compare itself to that expensive, original piece of PC fruit — in 1976, the Apple I also came without a case, power supply, keyboard and display.