World IoT Day: 5 underestimated costs that can scupper an IoT project

World IoT Day: 5 underestimated costs that can scupper an IoT project

By the Bytesnap Design team.

It’s expected that the number of connected IoT devices will surpass 43 billion in 2023, a phenomenal growth rate and massive opportunity for devices to contribute to our age of digital transformation. As World IoT Day approaches it’s time to celebrate the era of connectivity and a great time to fine tune new IoT product planning.

McKinsey, when predicting the number of IoT devices in use in 2023, surmised that “maturing underlying technologies will make Internet of Things technologies easier to implement and help companies and investors seize new opportunities.” Although large enterprises will benefit, a maturing IoT market sees small and medium sized enterprises poised to benefit too.

As an example of just one field of application for IoT, the World Economic Forum (WEF) says 84% of current IoT deployments can help to address sustainable development goals and that, “IoT technology is a huge opportunity to build a sustainable and prosperous future for SMEs.”

Developing and launching an IoT device is a complex task though, and can present unexpected costs and pitfalls. Here at Bytesnap Design, our expertise is in product design and development, reducing project risk and accelerating time-to-market.

Here’s our five-point guide to a smooth IoT device development journey.

1. Develop for low power

Often manufacturers developing an IoT product rush to get a prototype ready for managers, investors or customers. Sometimes in this rush to create a prototype an important factor is missed and that is whether the product has been developed as a low power device.

Developers might decide to look at reducing a product’s power usage or extending any battery life later, but underestimating how long and how costly leaving low power development until later in the process can be is a critical mistake. This could actually result in a significant redesign of a product and become a battle of diminishing returns.

Device developers should always factor in low power development and battery life considerations into Gantt charts and into product development time and budget. As the world progresses towards sustainable energy usage this will become more and more important.

2. Consider mechanical tooling needs

In early-stage product development 3D printing is often used to rapidly develop a prototype and that results in a well-made product, quickly. However, 3D printing isn’t scalable for mass production as the technique is expensive per unit and slow.

Most IoT product manufacture uses injection moulded plastic for casings and aesthetics because the unit cost in production is low. Injection moulding produces a functional, well-finished, and IP rated end-product. But an important downside to consider is the one-off cost in creating the tool which can run into the hundreds of thousands depending on the finish detail and the complexity of the tool.

It’s well worth obtaining tooling estimates early and budgeting in the cost before furthering mechanical design work.

3. Factor in compliance

A third group of unexpected costs that IoT device developers can encounter stem from compliance testing and certification and also from joining relevant standards bodies.

Developers understand that certification is required such as for CE marking in Europe and FCC and UL in the USA, but they often underestimate how heavy the costs of certification can be. At Bytesnap we often see our device development customers shocked by certification costs. Test houses can charge upwards of a £1,000 a day to use their facilities and compliance testing takes a number of days to weeks.

There are also numerous types of testing. Testing can be mandatory or advisory, and some customer regions can have a self-certification environment, while others will conduct mandatory testing. Environment testing, safety testing, EMC testing and radio testing may all need to be considered.

Different parts of the globe have different testing regimes, with compliance providing access to that product market.

Furthermore, there’s the cost of joining standards bodies such as the ZigBee Alliance, whereby a device must be certified or registered per the Alliance’s rules.

Often developers are not fully aware of these costs and they can represent a hefty sting in the tail at the end of a product’s development.

4. Understand production testing needs

Moving into a product’s manufacturing stages, production testing is another critical consideration that needs to be planned and effectively budgeted for. Every device moving through and out of a factory must be assessed to ensure it works properly and matches the original compliant design..

IoT product developers must create a testing process suitable for volume manufacture that is implemented at the end of the production line. There are many methods of production testing and the most suitable will depend on the volume of devices produced and the device functionality.

The responsibility for production testing must be allocated to the appropriate team or to the factory, and the costs accounted for in both the production budget and cost-price of the device.

5. Be aware of beta programme requirements

Finally, beta programmes can be an unforeseen financial burden. Product recalls hit the news all the time both in the automotive and white goods industries, after shipping or even a year or two down the line. Major failures can result in hugely expensive product recalls that can be catastrophic for a business.

So a beta testing programme in the user environment is the best solution.. This may mean testing 50, 100, or more units in the real world and with actual users. These customers may be non-technical and will see help to identify different issues with a product, compared to technical experts or those already familiar.

In summary, an IoT device development project can see unexpected, or not fully anticipated, costs from:

  • Low power development
  • Mechanical tooling
  • Compliance and alliance participation
  • Production testing
  • Beta testing programmes

ByteSnap has a complete guide for developing a proof of concept IoT device through to final production available to download at

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