Office, Factory, Business Model, and Ambitious Plans of Shenzhen Xunlong Software, Orange Pi Maker

Parts of the article have been updated after Steven Zhao update at the end.

Since Steven Zhao is the only one contact person at Shenzhen Xunlong Software, the maker of Orange Pi boards, and the company appears to be focusing on hardware development more than on software and documentation, so at one point in time, people were speculating that it could be one person operation 🙂 Last year, Steven told us there were over 10 persons working in the office. But hey, photos, or it’s fake! We now have a definite proof as Renaud Coustellier visited Steven Zhao in his Shenzhen Offices, and published a report on Minimachines (in French). I’ll provide a summary below, but visit Minimachines website, if you want the full story and more pictures.

First, Shenzhen Xunlong rented a floor, or part of it, in one of the many Shenzhen office buildings, and engineers are working in the typical cubicles, you’ll find in most other companies in China. The 200 m² office is now occupied by 50 employees doing hardware design, testing, and some customer support, and another part of the office is used for shipping parcels to customer. Manufacturing takes place in another factory in a cheaper place in inner China.

Click to Enlarge

The company is not only doing development boards, but also working on projects for their customers such as point-of-sales and game consoles. Those are not Xunlong products, and Renaud was not allowed to take pictures.

Xunlong was apparently initially involved in the development of the first Banana Pi board, and then went on to create their own Orange Pi boards. We also learned the typical development cycle for a new board: two months for the first design, and one month extra for testing, before mass production, so it takes around three monthsin total. Each card has to go through hardware and software tests to pass QA.

Xunlong sells around 40,000 boards per month, but the company is ambitious with a target of around 100,000 units per month by the end of 2017, and a new 5000 m² factory is now being built in Dongguan. Another positive point is that the company plans to hire (more) software engineers in 2017, instead relying  only/mostly on external projects such as Armbian. According to the report, beside Orange Pi board samples, the company also gave $24,000 to Armbian community to help them out. Xunlong also launched an initiative to provide free development kit if you have a specific project for it that would be beneficial to both parties (but I could not find a link).

Renaud and Steven (Right)

Then we also learn a bit more how the company can make boards at such a low price, and this get interesting. This was their conversion:

  • Steven: Orange Pi can purchase a good WiFi component for $1, with which boards will have a good WiFi connection
  • Renaud: Hmmm, if the price of the components is $1, then the price will be higher to the end user, and if you tell me the price, then I know your margin…
  • Steven: No, because today, all Orange Pi boards are sold to the BoM price.
  • Renaud – Does that mean the cost of engineers, office rental, equipment for development and design, and so on, is not reflected int othe price of the board?
  • Steven: Correct.
  • Renaud: But how how is that possible?
  • Steven: We receive subsidies from the government.

There you have it. That explains everything. We all pay about 50% of what we ought to be paying thanks to the Chinese taxpayers.

Beside the new factory, Xunlong has other bigs plans, as while they now sell though Taobao in China, and Aliexpress to the rest of the world, they plan to setup their own shop, where we should be able to buy the board directly from them. They intend to expand to IoT boards with 2G to 5G boards, ARM servers, and so on, and over the next 3 years, the plan is to recruit around 500 engineers, and sell ten times more boards than Raspberry Pi foundation. Maybe subsidies will have long been gone if that happens…

[Update from Steven:

Yes, there are some mistake, maybe it is because our translator wrong expressing.

1. About time arrangement for designing a new board: yes, we need 2 month for first design which also include samples production, but usually we take only 40-45days(30working days). Then after tested at customer side, we need around one month (20working days) for mass production. Which mean for a new product we need 3 months if do not take customer’s time calculating in testing.

2.  The new factory size is only 5000㎡ in Dongguan, and yes, we will donate Armbian $24,000 by the end of this year, for now we have only donated them part of the total amount.

3. About our cost and subsidies from government, yes, we sell most of our product at BOM cost, but we also have some models that still have margin profits, like PC Plus, Plus 2. If we keep running behind our expenses, how could government could support us? Government would not support you, if you have no income, they could only support you parts of the cost, like engineering cost, or part or office renting cost. So most of the cost should cover by ourself, we need to figure out how to how to sell more with margin profit. As you see, we do it now.

Finally, yes, we know what our weakness is, we will try to improve it in the following days.]

Thanks to Nobe for the tip.

Jean-Luc started CNX Software in 2010 as a part-time endeavor, before quitting his job as a software engineering manager, and starting to write daily news, and reviews full time later in 2011.

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lordzahl
lordzahl
3 years ago

..only in China 😀

Daniel
Daniel
3 years ago

Wow seems Orange Pi is here to stay. Let’s hope their software promises come true, I quite like their boards.

Varghese
Varghese
3 years ago

it is really a good hardware , only headache is display ( raspberry will show something on the screen irrespective of resolution setting) which is very normal for a mobile SOC chip. if you have some software background,it is not a big issue … again kids always expect to spoon feed them & they always complain.

OvCa77
OvCa77
3 years ago

On this picture I see some new Orange Pi boards: http://farm5.staticflickr.com/4256/35919334535_2d794aecd1_o.jpg

JotaMG
JotaMG
3 years ago

” the company has gave $24,000 to Armbian community ”

-> what a waste of money !!

JotaMG
JotaMG
3 years ago

” We receive subsidies from the government ”

-> and, of course, customers receive some spy bots hidden in firmware… really!

theguyuk
theguyuk
3 years ago

I wonder about Nanopi Friendlyelec, are they government paid or is Orange Pi dumping model going to damage Friendlyelec Nanopi?

The apply for a dev board link under community on Orange Pi site is only I have found, do they have a different apply page on Chinese version of site I wonder?

PM Nordkvist
PM Nordkvist
3 years ago

Wow! Great read. I always wanted to know möre about these guys.

Wolf
Wolf
3 years ago

Excelent news. That RTD1295 dev board may be the one I’m looking for (native SATA+GPIO will make it a win for me)
I hope you’ll get your hands on a sample board soon for a proper review.

2mike
2mike
3 years ago

// if the price of the components is $1, then the price will be higher to the end user///
stupid mentality 🙁
End users are forced to spend a few dollars to purchase a separate wifi dongle 🙁
//We receive subsidies from the government.///
Now it’s clear, why they do not fix bugs in their boards.
The only advantage of their boards is the low price and low postage of aliexpress

nobe
nobe
3 years ago

@OvCa77 you’ve got good eyes 😉
in another picture, on a desk, we can also see a bunch of very small boards with 2 ethernet connectors side by side. i’m not sure it’s a known product.

Fossxplorer
Fossxplorer
3 years ago

@JotaMG
Why do you state that? For me it seems Armbian community puts a lot of effort into supporting different boards.
Also, $24.000 is nothing wrt. to salaries of IT personal in north Europe in general.

JotaMG
JotaMG
3 years ago

@Fossxplorer
because even with 1% of that resources, the students at my local university can do a much better job than Armbian does !
(for instance they already had design a much better and friendly install)

Drone
Drone
3 years ago

“We receive subsidies from the government.”

Enjoy those impossibly low prices while you can you dumb Capitalist Sheeple. Once the Chinese put all your domestic factories out of business, they’re gonna bust you like a shotgun and shove a broken baseball bat straight up where the sun don’t shine!

theguyuk
theguyuk
3 years ago

@Drone
Which countries factories you thinking of?

lvrp16
lvrp16
3 years ago

Some information here are not necessarily correct. They only have a small subsidy from the government that is open to all tech companies that want to fill out a pile paperwork. The boards are also not sold at BOM.

It is a kind of misinterpretation of China of sorts thats to be expected. Also, Raspberry Pi is only a small player in the sbc market. The big ones do not make the headlines.

Renaud Coustellier
Renaud Coustellier
3 years ago

Thank you to publish my article wand my photos without my authorization.
I will see what to do, but i am speechless. Incredible.

KaiZen
KaiZen
2 years ago

any action taken yet ?

LinAdmin
LinAdmin
3 years ago

I am not in a position to believe all what this french guy said. Maybe Igor will comment?

itchy n scratchy
itchy n scratchy
3 years ago

Missing @tkaisers rant 😉

TC
TC
3 years ago

itchy n scratchy :
Missing @tkaisers rant

he is probably still typing on it 😉

Fossxplorer
Fossxplorer
3 years ago

@TC
More likely on vacation 🙂

crashoverride
crashoverride
3 years ago

After receiving $24,000, what is there to rant about? I would say kind things for half that! 🙂

Igor
3 years ago

> Maybe Igor will comment?

I can only confirm that donation was promised and that man on the picture is Steven Zhao. Donation is not on the level to help expansions since we already have few full timers (with a real paycheck), from Europe, to keep the project running + there are other fixed costs. Armbian project is non profit and we are probably exaggerated 99% away from making one. In such project there is no need for hiring slave labour @JotaMG to do our “lousy job” better.

Igor
3 years ago

@Igor
I manage to make a mistake in such a short notice … “with” a real paycheck is “without” a real paycheck 🙂

theguyuk
theguyuk
3 years ago

@Igor
For those of use not in your trade can you give us a idea of what costs the project has to meet?

JotaMG
JotaMG
3 years ago

Well Igor…
I follow your work since early days of cubieboards, and respect you very much for what you have achieved.
Armbian has done some very positive contributions to the usability of the boards.
But my opinion is that now Armbian seems to have lost its Karma….

Regarding you unfortunate and even stupid comment about “hiring slave labour”, I’m just a teacher, they are not even students from my classes. Their code is still alpha quality (but works) and they are still undecided what to do with it, but its up to them to decide.

Jon Smirl
3 years ago

@theguyuk

Fully loaded software engineer in the US capable of working on the Linux kernel costs a US company at least $250K/yr probably more like $350K in SF. Fully loaded includes office, equipment, expenses, all taxes, medical, SS tax, etc. –
this is not salary. Around $80,000 of that ends up in property, state and federal taxes. Even if you rent you are paying property taxes. Of course all of this varies hugely between SF and Alabama.

Igor
3 years ago

@theguyuk Open source projects can and do create value and debt. Our is no exception in this. Some are repaid with micro donations but only if you manage to make users happy and if they can and want to give something in return. This is extremely hard and rare. And on top of this, we need to fight predators, which abusing even more of our precious time. If we don’t count time working on a project – research & development, planning, giving free 1st class end user support, if we neglect this is actually a daily job (for few people)… Read more »

Jerry
Jerry
3 years ago

@Varghese
Yes, RPi is still a better choice if you need open source 3d graphics and HDMI CEC on your NAS. It’s sometimes hard to choose between gigabit LAN & native SATA ports and a 100M LAN shared with USB/SATA bridge on the same USB2 host.

TC
TC
3 years ago

Igor :
For one(1) general IT person (not kernel hacker) in my country, they start at around 35.000 EUR / year (taxes included). In Germany, this is about doubled and in Swiss tripled.

Munich, right? 😉

Here in the North of Germany IT’lers are more near to the 35k, tho…

Eric
Eric
3 years ago

@Igor I just hope JotaMG is not an EE or softdev teacher, because that’s just scary in terms of emptyness and basic financials… beat armbian for 240$… he should start a freakin kickstarter! If I would be half as bad as trolling, I’d say he’s from the “if you can’t do it, teach it”. Oops. Jealous people seeing 5 didgits going boohoo is sad. 24K is nothing in terms of operations, its not like if Armbian won the lottery nor its a “waste of money”, because one of the reason I (and a lot of people) tried a few orangePis… Read more »

miniNodes
3 years ago

Orange Pi Plus 3 (top left board in photo) looks to be interesting. Upgraded from 32-bit H3 to A64, and if it has 3 or 4gb or RAM then yes, virtualization becomes possible. SATA speed will probably be limited, but, we’re not expecting to break any speed records at this price point. 😉

nobe
nobe
3 years ago

hopefully the useless internet drama will now stop…

very interesting feedback, thx.
also this is close to @lvrp16 ‘s comment.

tkaiser
tkaiser
3 years ago

@miniNodes That’s no OPi Plus 3 but you’re talking about already selling ‘Orange Pi Win Plus’ (A64, 2GB DRAM, 4 USB ports sharing bandwidth). IMO way more interesting is the Plus 2E successor called ‘OPi Prime’ with H5 that is two times on the picture. Both boards have 2 GB DRAM since this is the maximum we get with Allwinner anyway (won’t change with H6 too unfortunately). ‘SATA speed’ does not exist since these things have no SATA. But when using a good UAS (USB Attached SCSI) capable USB-to-SATA bridge performance is already known and can be found as always… Read more »

Mum
Mum
3 years ago

To all this debate about funding Armbian… Of course it’s nice that the project gets money so they can improve build system/infrastructure, etc. As Igor mentioned, it’s structured as non-profit, so money just increases the capacity. No one is contributing to Armbian and expecting to make money from it. To everyone else saying $24,000 does not pay the salary of employees, of course you’re right. But this has never been the point of open source. The Linux kernel is arguably the best example of this. Sure, a lot of people who commit to Linux work for companies like Intel, AMD,… Read more »

tkaiser
tkaiser
3 years ago

@Jean-Luc Aufranc (CNXSoft) Yeah, RTD1295 Ethernet performance looks promising but we have 2 GbE ports here and iperf/iperf3 are no real network benchmarks anyway (as quick ‘saturate link’ test sufficient, for everything else rather useless). Wrt storage you can’t test with HDDs anyway (since way too slow). If you want to test for SATA 3.0 bottlenecks you need something like a Samsung 850 Pro with at least 256 GB capacity (since the 128 GB variant is still too slow: write performance is below SATA 3.0 limitation). Wrt USB 3.0 the same applies (USB3/UAS is good for up to 400 MB/s).… Read more »

JotaMG
JotaMG
3 years ago

I say it again: giving money to Armbian is a complete lost of time and resources.

( why? well, you know… because money just can’t buy talent and inspiration… )

And Igor comments here (and Thomas Kaiser on other topics) pinpoint with extreme precision why Armbian is going nowhere: you now feel like gods of the arm world !

Daniel
Daniel
3 years ago

You are aware that you and your students are perfectly free to create something better than Armbian, aren’t you? Who knows, if anyone would use it, they might even pay you.

Every Armbian dev contributed their time and knowledge to create what is objectively the best OS for the supported SBCs, so they can rightfully voice their opinions and experiences, whether others agree or not. I’d rather read tkaisers complaints than buy an OPi Zero, or read about those NAS tweaks and apply them than not knowing about them.

tkaiser
tkaiser
3 years ago

Mum : it would be great if they listened to the community during design (e.g. don’t release products with crummy WiFi radios) Well, XR819 on OPi Zero is one example for a bad Xunlong hardware choice and GL830 USB-to-SATA bridge on their first H3 board ever (Orange Pi Plus and later ‘Plus 2’) is another. Do you know a third? 2 years ago GL830 was used everywhere and is still used on some new products today but at least Xunlong doesn’t use it on their new designs any more (on their NAS Expansion board there sit 2 great JMS578 USB-to-SATA… Read more »

Jon Smirl
3 years ago

@tkaiser Maybe Armbian could help out on the Android front. Right now Android support is chaotic. A first step would be to simply get the releases we have for Allwinner and Rockchip checked into source control and then verify that they build the images without issues. Doing that would provide a central repository for people to work in since the vendors won’t supply one. It also eliminates the need for everyone to painfully copy 6GB files out of China. Doing this generates a significant git load so maybe do it on github or gitlab and then just manage it via… Read more »

Drone
Drone
3 years ago

@theguyuk
@theguyuk, you said, “Which countries factories you thinking of?” Answer: Obviously any factories EXCEPT Chinese factories!

TC
TC
3 years ago

tkaiser : There are rumours that most recent OPi Zero PCB rev 1.4 has a different power design allowing XR819 to ‘perform’ better. For reasons unknown to me nobody is testing this and I really don’t feel like wasting my own time again to do such tests in my spare time. is there a 100% chance getting a 1.4 rev when ordering now? probably just not enough people got one so far… irt to what you do for the community, 24k is a joke, tho. Armbian is like the actual SW dev department of Xunlong @Jean-Luc Aufranc (CNXSoft): can’t you… Read more »

Tj
Tj
3 years ago

Still dreaming of cheap soc with multiple native sata ports with minimally 4gig ram.
Dreaming to replace linux with zfs on linux with arm based.

My mutiple zfs are running x86 entry level server board

My dream is minority voice in cheap arm sbc board on my understanding.

tkaiser
tkaiser
3 years ago

tkaiser : And then on another picture the small H3 or H5 OPi Zero board which seems to expose Fast and Gigabit Ethernet (EMAC/GMAC) at the same time. In the meantime Icenowy fortunately reminded me that’s not possible since the only Allwinner SoCs having both EMAC/GMAC are A20 and R40/V40/T3. Looking at http://farm5.staticflickr.com/4280/35919268085_43dbf1ec0c_k.jpg again another variant would be H3/H5 combined here with the usual external RTL8211E PHY (7x7mm 48-pin QFN package) using the SoC’s internal Gigabit Ethernet MAC and one of the SoC’s USB2 host ports (usb1) directly connected to an RTL8153 USB GbE adapter (also 7x7mm 48-pin QFN package).… Read more »

cortex-a72
cortex-a72
3 years ago

because SBCs have been made with mobile SoCs. that’s why your dream is so unrealistic. in addition to the “at least 4 GB of RAM” and “cheap” don’t mix well.

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