Droid Designations

I've been putting some thought into how the numbering systems for droids work.

As an example from canon we have C-3P0 and K-3P0, more or less identical protocol droids. Their designation seems to be the first letter, restricting their production run to 26? assuming they have a similar alphabet in aurabesh i suppose.

Similarly with R2-D2, the number of R2 units is now limited to roughly 260 units.

How does this system work or are there really only 26 protocol droids in the galaxy?

 

I think Pablo Hidalgo said in his Insider column that most designations are only abrieviations of serial numbers, I.E. R2-F9 is really R2-F95654-GH50YU17 etc. Really that was the only question of any value he ever answered.

 

I'm not sure if the serial numbers are that long--the one known example of a longer one (from Wraith Squadron) is only R2-D609....