An art project like the one mentioned is relatively small. CE projects, which want to ship millions of units is an entirely different affair, usually costing millions of dollars and large teams composed of many different specialities.
Even if you did raise $5 million USD you still need a design team and manufacturing. And there's no guarantee of success either. I just don't see Kickstarter helping much.
Perhaps we merely need to modify the thesis: Kickstarter is the user interface by which independent designers connect a thoroughly mature, ever-improving ecosystem of OEMs and prototyping shops to consumers, thereby potentially disrupting consumer electronics.
The real force here is small-batch manufacturing, which has been a long time in coming. Laser cutters, water-jet cutters, 3D printers, and - perhaps more importantly - the technology to enter a credit card number, press a button, and ship your CAD drawings around the world to a shop in some Chinese city where a team of machinists can whip up a thousand units for small amounts of money.
But the way this technology manifests to US consumers is via Kickstarter campaigns.
And, sure, if you want to scale any of these Kickstarters up to millions of units you'll need a real manufacturing team and capital. But, as with software startups, it's easier to raise capital once you've found product/market fit. And here we have the other advantage of Kickstarter: It makes it easier than ever to find and energize a collection of early customers.
Don't think for a minute I'm satisfied with the status quo. I'd love it if all these rapid prototyping tools got cheap enough for mass production. But that's not how it is now or for the near term.
Actually, there is one area where rapid proto has helped, and that is with PCB manufacturing. It is relatively easy to get boards done quickly. The board outlines are done with CNC, and the holes are often laser drilled.
But your job is definitely not over when you email the design file, in many ways it is just beginning.
How does the Pebble Watch fit into your understanding of the difference?
They have a small team, single designer. Although they built a consumer electronics product before they seem to run on fairly limited funding.
Although I don't know of any Kickstarted consumer electronics designs that have already shipped successfully, so maybe the specific viability is not yet proven.
The Pebble watch is cute, and small enough scale that they might actually ship product. The question is, at what price?
Remember, we're talking CE, so every penny counts. Unless they've assembled a very good team, that thing will retail for over $100.
If the product seems like it might be successful, somebody like Samsung will jump in right away with a competing product for $50 USD. And 6 months after that the Chinese clones will be coming in at $30. Good luck trying to turn enough profit to fund development of the cost-down version.
The big boys like Samsung and Foxconn are so vertically integrated. It is tough to compete with them when they can buy the chips at a much lower price than you can.
Well, but they will get some amount of money from the initial batches and then they might grow, get bought by someone, or who-knows-what.
But the point (for me) is that they're developing a piece of consumer electronics that is actually useful. Right now there's (AFAIK) nothing there comparable to Pebble (wearable, nice-looking, programmable e-paper interface to smartphones). It's a hacker gadget, something that is heavily useful and can be made even more by anyone with a bit of free time on their hands. It's a very rare situation in consumer electronics market (Android is kind of new here, and vendors are going out of their way to break it anyway).
So yes, let's have Samsung jump in with a competing product for $50. And then maybe Nokia, or someone else. I would be happy to see that, because an useful tool would appear on market, and it doesn't really matter who provides it, as long as it's not crap.
Unless they've assembled a very good team, that thing will retail for over $100.
From the $99 pledge description: "This watch will retail for more than $150"
They've already sold devices for blackberry so they have a good grasp of what the costs are: http://getinpulse.com/
They now have what are essentially pre-orders for over 25K devices at around $115 a piece so they're on course to make a good profit on the first generation, and they'll have the brand, ecosystem, and everything they learned making the first generation to make the second generation devices a better offering than anything the competition can put together. They're targeting smart phone users who don't mind paying a premium so price won't necessarily be the deciding factor.
I think we see a little of what your talking about with Shapeoko ... awesome idea, execution, community... but the guy hit a scaling hurdle and put maybe a tad too much on himself, but now it is being handled by others, so the whole thing worked out. Other projects will have other experiences, and his situation is unique in most other ways, but it does coincide a little bit with what you're saying.
Another one is Open Pandora, the game console. It didn't use Kickstarter (it started before that was popular), and it took a while to get going. Go read their blog about the ir production difficulties. The last I checked, they had shipped only about 4K units. They started with a high-end mobile processor, but that was years ago, and the latest gen phones and tablets have eclipsed them. They've had quality issues too, because they didn't have good production line testing.
I've been wondering how easily a situation could arise in which an underdog could try something like this on Kickstarter and give up, and end up having done nothing but provide free research into market demand that a bigger player with more resources can then take advantage of.
An art project like the one mentioned is relatively small. CE projects, which want to ship millions of units is an entirely different affair, usually costing millions of dollars and large teams composed of many different specialities.
Even if you did raise $5 million USD you still need a design team and manufacturing. And there's no guarantee of success either. I just don't see Kickstarter helping much.