Scott, Chelton (formerly Sierra Flight Systems) wasn't "lured" into the experimental market, they started in the experimental market over 8 years ago.  Their primary market now is retrofit as is evidenced by their ~500 STCs. Retrofit is a much larger market than new aircraft but you need an STC for each installation, a 1M$- 5M$ proposition, so the barriers to entry are quite high. That is why Garmin focuses on the manufacturers where the manufacturers handle the STC leg work.  Selling to retrofit, or experimental, takes many times the support effort per sale. It is one thing to justify comprehensive customer support when you have a relatively simple device (handheld GPS) that you have sold 500K units and quite another to justify initial engineering, STC efforts and comprehensive customer support for a complex system that  you may sell a couple hundred a year. With Garmin making all their money in the consumer markets it makes the retrofit and experimental look even more obscure. Garmin has just started climbing the barriers to the retrofit market while Chelton sits comfortably on the other side. Then there is the liability. At least when you are selling to a manufacturer you have an insulating layer, but when you are selling to the end user....  Hamid is right, the bean counters won't freely tolerate retrograde expansion once the numbers come in.

Of course I could be wrong. Garmin could be making a strategic move on Chelton in response to Chelton winning OEM contracts (Bell and others) with their new 10.4 inch IDU. It will be interesting to watch.

Brent,

 

I guess it depends on one's perspective.  SFS/Chelton abandoned the experimental market for some time before returning to it - I am sure that one of the reasons was that indeed D2 would be handling the support.  There is every reason to infer from your arguments (and Hamid's) that Chelton will abandon the experimental market once again when they realize that it may have been the support side costs that brought down D2.

 

I would also guess that Garmin now has a very favorable position with the FAA relative to all the products it has successfully delivered to the aviation community - even if it has gone out of the house for some products and components (UPS, SIRF, etc).  Having control over interconnected avionics is certainly a positive and can reduce costs on newly introduced components.  Of course, Garmin does not directly support the end user since it has a large number of avionics shops to take care of that function.  Chelton may be in for a surprise when it takes on the tasks that D2 was performing.

 

Garmin has vaulted the OEM, retrofit and experimental quite handily with all its panel mount avionics.  One can find them everywhere.  Admittedly, it would seem much more difficult to obtain STCs for one box that does everything but eat (DEBE) than ones that serve narrower objectives.  Garmin sold the 430/530 to "experimenters" (in addition to certificated avionics shops) shortly after the FAA did not require an FAA signoff for each "/G" installation.

 

Support aside, generally, high tech items have high R&D costs and low reproduction costs, especially if the hardware components come from certain overseas countries.  Also, one of the ways to lower the R&D costs is to spread them over different products in the same line.  These days, the big difference is in the software - high development costs, almost zero reproduction costs and controllable maintenance costs if somebody else is on the front line.

 

What surprises me is that fancy avionics developers haven't figured out a way to charge yearly for "maintenance".  For example, turning over database updating to Jepp cost Garmin a continuing income pipeline after the original GPS products were sold.  Of course, maybe I just can't get my head out of mainframe software business practices.

 

Oh well, sorry to see D2 crumble.  Kirk and his skilled staff should be able to find positions in the industry.  Good luck to Chelton. And certainly, good luck to the D2/Chelton customers.

 

Scott