I too called BS on the LiFX bulbs. In part because Phillips had recently won a prize for one of their LED bulbs and it cost them $25M+ to develop. So even accounting for 'knocking down the hard problems' I couldn't see a 10x reduction in cost.
However the cool thing about it was that they saw an actual demand for programmable LED bulbs with RGB capability and came out with 'Hue.'[1] I suspect they took the Apple Store only route because it was a single partner who could conceivably move enough product to technical saavy people. It seems to have worked as they are sold out in the Bay Area, not sure how many kits or bulbs that was in the initial batch but probably a few. They also sell the bulbs for $60 each, which is another interesting number. If you take all of the money raised for LiFX and divide by the number of bulbs they are committed to shipping out as rewards it comes to $55/bulb.
[1] Full Disclosure: I bought a starter set of "Hue" lights when they were announced and did not back the kickstarter campaign for LiFX.
A 10x reduction in development cost is reasonable for a small company. Large corporations have to float a huge boat just to stay motionless. Another way to say it is that they burn millions of dollars per day just to exist and do nothing else. When you see cost-of-development numbers for large companies they include an element of total-cost-to-just-exist/days-per-project/number-of-current-projects (oversimplification).
A small motivated team without the baggage and overhead can certainly do thing far, far cheaper than a large corporation. In fact, it can put a large corporation to shame in terms of productivity and the ability to pivot and innovate.
Where things get difficult for a startup is when it is time to move to manufacturing. Unlike software projects, making physical products is really capital intensive. The first phase is, of course, the upfront design and DFM work that has to be done. Then comes all of the prototyping and testing. Finally, setup for manufacturing, procurement, manufacturing, packaging and shipping. If a startup isn't well funded it might be able to get through the design phase but not survive to reach manufacturing without an additional influx of funds.
Comparing startup development costs to huge company development costs is non-sensical. For starters, Phillips would need to worry about multi-multi-million dollar lawsuits. LIFx won't. And there are many similar issues.
However the cool thing about it was that they saw an actual demand for programmable LED bulbs with RGB capability and came out with 'Hue.'[1] I suspect they took the Apple Store only route because it was a single partner who could conceivably move enough product to technical saavy people. It seems to have worked as they are sold out in the Bay Area, not sure how many kits or bulbs that was in the initial batch but probably a few. They also sell the bulbs for $60 each, which is another interesting number. If you take all of the money raised for LiFX and divide by the number of bulbs they are committed to shipping out as rewards it comes to $55/bulb.
[1] Full Disclosure: I bought a starter set of "Hue" lights when they were announced and did not back the kickstarter campaign for LiFX.