Google Glass components cost only $80
By Jane McCallion
Posted on 2 May 2014 at 09:27
The hardware used to make Google Glass costs less than $80, although the smart glasses sell for $1,500.
According to teardown.com’s estimations, the single most expensive element of the device is the Texas Instruments OMAP4430 processor, at $13.96. The cheapest is the battery, at $1.14.
In total, the materials that go into the expensive set of glasses costs only £79.78 to build, although there's of course assembly, research, software and profit margins to consider.
Assembly labour may be one reason the margin is more extreme between the bill of materials and the final selling price than other devices.
Unlike many smartphones, Google Glass is assembled in California, where the minimum wage is $8/hour, while the minimum monthly wage in Vietnam, where some of Samsung’s phones are assembled, is $90/month, and in Taiwan, where Foxconn is located, it is $592.60/month.
The manufacturing run-rates have also probably been small. The company has only sold a limited number of the devices. This would push up costs, as production of the device would not benefit from the economies of scale associated with mass production.
JP Gownder, wearables analyst at Forrester, told PC Pro: "$1,500 is the Explorer edition price. Since Glass remains in beta – with only around 10,000 people having the device globally – the price point doesn't reflect Google's likely go-to-market price."
"That said, this report of the cost of components creates a perception problem. Google Glass already looks like a toy for the 1% because of its beta edition price point," Gownder said. "And of course it suffers from perceptions of privacy violations. Together, these things make the mass market feel like it's a tool for the rich to cavalierly spy on everyone around them. So it will be important for Google to address its actual go-to-market pricing strategy soon.”
We contacted Google, but the company hadn't returned request for comment at the time of publication.
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I think the high price is a way for Google to ensure that the early adopters would also be serious about developing for the platform. If it were sold at a more reasonable price, I guess many of them would've ended up as unused toys.
By Pantagoon on 2 May 2014
With that kind of margin (and presumably demand outstripping supply) I'm surprised we haven't seen cheaper, fully working knock-offs on sale.
By Mark_Thompson on 2 May 2014
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