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existing assembly may be considered, in order to use a less expensive or improved subcomponent or to replace a subcomponent which is no longer available. In the world of embedded firmware, NRE may be invested in code development to fix problems or to add features where the costs to implement are a very small percentages of an immediate return. Chrysler found such a way to repair a transmission problem by investing trivial NRE dollars into computer firmware to fix a mechanical problem to save some tens of millions of dollars in mechanical repairs to transmissions in the field.
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terms. Once a system is designed any number of units can be manufactured without increasing NRE cost. NRE can be also formulated and paid via another commercial term called
Royalty Fee. The Royalty Fee could be a percentage of sales revenue or profit or combination of these two, which have to be
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The concept of full product NRE as described above may lead readers to believe that NRE expenses are unnecessarily high. However, focused NRE wherein small amounts of NRE money can yield large returns by making existing product changes is an option to consider as well. A small adjustment to an
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incorporated in a mid to long term agreement between technology supplier and the OEM.
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