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Since I wrote my first blog post back in February, I’ve become quite involved with Helium. If people are going to visit my blog and use the information here to make purchasing decisions and investments (hey folks, this is not investment advice), it’s really important for me to have skin in the game. Not only do I have RAK hotspots set up, Nebra miners ordered, but I also now have significant holdings of HNT. And quite a large group of friends and acquaintances who I’ve introduced to The People’s Network. I hope to contribute further to the community with blog posts like this one.

Update: Nebra is no longer accepting new pre-orders. My recommendation is to check out the tried-and-true supplier, Cal-Chip.

The most common question I’ve been asked has to do with hotspot shipping. Is it worth it to purchase a miner today only to receive it in late 2021 or 2022? Are there faster ways to get a hotspot? Why is this happening? Before I go any further I will say that do not possess any privileged information but I’m happy to provide some projections based on my own experience and what is publicly available.

If you’re just looking to get involved with Helium, check out my last blog post where I explore how you can get started:

Who Are the Suppliers?

You mine HNT by using a hotspot to transmit your wifi as radio waves. That’s the short of it. While a hotspot is essentially just a Raspberry Pi with RF capabilities and maybe a nice antenna, there is special firmware involved that prevents spoofing. Only Helium-approved suppliers/manufacturers have this firmware, so we’re dependent on them to supply hotspots. There are three official suppliers and a few additional distributors.

First, you have Cal-Chip’s Rak Miner. Some of these have shipped out but there have been delays on later batches.. I have one of these in my apartment. The current ship time is listed as “Summer 2021.”

Next, you have Nebra’s Indoor Hotspot. I have one of these on pre-order. Current ship time is listed as “Q3 Summer 2021.” At the time of writing, nobody has received a Nebra hotspot yet.

Finally, you have the Bobcat Indoor Miner. This supplier has drawn some criticism based on a stiff return/refund policy. They currently list their ship time as 8-12 weeks.

Why Are All Suppliers Significantly Back-Ordered?

These suppliers are small companies though they have some expertise and existing relationships with manufacturers. That’s how they were selected to become official partners of Helium. As experienced as they may be, they can’t afford to take massive risks with their demand forecasting. When it comes down to it, the model that suppliers are using makes total sense. Create a product, get it approved by Helium, get funding via presales, and then scale, build, and ship!

While these manufacturers might now be flush with cash–beyond their wildest dreams–they aren’t manufacturing the units in some garage in Palo Alto. They have manufacturing partners, probably in China, who are churning these things out. Great!

The problem when dealing with a global high-tech manufacturing supply chain is that, for some issues, money can’t solve your problems immediately. Speeding up production means you have to scale up your production capacity, which is extremely expensive and takes time. Forecast wrong, and you’re stuck with a huge loss. At least, that’s what I learned in MGMT 301 in college.

In addition to the various kinks that can occur in supply chains that I don’t fully understand, there is a global semiconductor chip shortage. Beyond that, all devices using radio technology must pass FCC (USA) and EC (Europe) regulatory approval. While Cal-Chip presumably has this, since they have already shipped out units, Nebra just received it today and people are quite excited about it!

Big News (When This Post was First Written) Nebra passed FCC/EC Approval

Just announced today (edit: now old news), Nebra’s first batch of indoor miners has received crucial approval and is supposed to ship soon. Many people were anticipating this as there has been a slight delay in the shipping of the first batch, compared to the projected date. I’m really happy with this development.

Is This Some Elaborate Scam?

No. First of all, Cal-Chip has already shipped out tons of the Rak miners. We’re closing in on 30,000 hotspots in the network. The hotspot pre-order/backorder process probably isn’t some type of outright scam. It’s just not worth all of the time and effort for these suppliers to do something like that. I trust the Helium team to approve these suppliers and I don’t think it would be an exaggeration to say that Helium as a company and these suppliers are speaking with each other on a daily basis.

Ultimately, what’s the upside for a supplier to do something shady? Just file a chargeback on your credit card for your $350 and call it a day if the company actually ghosts you. The bigger risk is to the reputation of the community and how a supplier, say, becoming insolvent, would undermine trust in the current model of obtaining hotspots.

Why Are Suppliers Continuing To Process New Orders if They’re so Backlogged?

This is a good question. In the trading card space, you have PSA basically refusing all new submissions of cards to be graded because the company is still working through a workload from 2020. Including the cards I submitted in October. One would argue that, after a certain point, it becomes irresponsible to accept new orders.

If our suppliers are to be believed, they claim that scaling manufacturing capacity up is only a few months away:

We are building in capacity for a minimum of 20k units a month of production from July onwards, however we can scale this up or down if necessary

https://www.nebra.com/blogs/news/nebra-hotspot-miners-production-and-shipping-mega-update

On the other hand, a low-tech company like PSA has to train highly-skilled employees (their card graders) while maintaining high standards and keeping all of their promises. Do I believe that Nebra is going to be able to scale up manufacturing capacity soon? Yes.

Why? If there is demand for these miners, if the money is flowing in, if it’s “all systems go,” why the hell would a company not be doing everything in its power to get you the product you ordered? There are so many conspiracy theorists out there. The units are being manufactured as we speak. If they keep getting pushed back, orders will gradually shift to suppliers that are keeping true to their promises.

What Happens if Helium Allows DIY Hotspots?

You can’t build your own hotspot. This was discontinued due to fraud/spoofing risk during the time that these devices were allowed. As the suppliers became overwhelmed by demand and Helium (the company) was inundated with requests about these order backlogs, I’m sure the point was floated–why not put The People’s Network back in the people’s hands?

Sounds kind of cheesy, but that’s one way to do it. Except, then, instead of having multiple suppliers working on built-for-purpose hardware in an industrial supply chain, you have the hoard of Helium DIYers devouring the world’s supply of Raspberry Pi devices. It would just shift the problem elsewhere to manufacturers who have no idea where the demand is coming from, kind of similar to what’s going on in the antenna world now.

Should I Buy a Hotspot Right Now?

Until today, when Nebra released a positive update, many were beginning to doubt the ability of these suppliers to deliver hotspots anywhere near the promised dates. People were complaining about the lack of information following one very detailed update from Nebra, and… people were complaining about pretty much everything they could. I’m sure these tiny teams at the suppliers are completely overwhelmed.

I truly believe that the best time to start with Helium is yesterday. And you know how that saying goes. To “risk” a few hundred dollars on one of these hotspots is worth it, to me. It ends up being delayed? It might be even more delayed if you wait until October to order one. There’s a bit of mayhem, but once the Nebra orders start arriving and further batches of RAK hotspots, all will be well with the People’s Network.

As always, thanks for reading! Let me know your thoughts below–are there angles I’m not considering?

What’s Going on with Helium Hotspot Order Shipping?