RSI manufactures sub-15 cent gen2 RFID tags

The RFID tags cost have come down to sub 15 cents. The prevailing rates are 40 cents per tag now, but RSI promised to give us tags sub - 15 cent. The constraint being we need to order 1 million tags => this equals = .15*1000000 = 150,000 $.

The RSI also claimed that there is no reduction in standard or quality. So, this cost cutting should have been due to some of the best manufacturing practices that would need to be followed by RSI.

So let us think of a scenario where the 40 cent tags are a fixed cost and .15 comes due to the variable cost for 1Mn and <1Mn its 40 cents. So the graph would look like the one on the right side.

The cost is expected to come down to 5 cents in next 3-4 years and the way to do that is better production models.

Probably, we should start manufacturing it in India for better cost effectiveness? Mr. Murthy can u give me a chance to own this ?