Google’s ambitious Glass product, wearable tech that projects online information to users, carries a hefty price tag if you’re lucky enough to be one of the few already able to purchase it. Yet an analysis of the computerized eyewear by website teardown.com shows that the $1500 glasses are constructed from a mere $80 worth of parts.
Following a recent one-day sale, during which Google sold out of every available version of Glass within 12 hours, experts at teardown took a unit apart to see what went into manufacturing the tech. The most expensive part of Glass? A $13.63 Texas Instruments OMAP 4430 applications processor. The device also contains 16GB of memory, costing roughly $8.18, as well as 1GB of RAM, which costs $4.68. The camera, battery, and display are all likewise inexpensive parts, leading some to question why Glass comes with such an apparently inflated price tag.
While the disparity between price and manufacturing cost would seem to indicate that Glass is an unusually profitable product, there is actually far more going on than appears at first glance. While Google hasn’t announced how much it has invested in research, development, and start-up for Glass, those costs certainly have to be reflected in the price of each unit. There are also intellectual property aspects to consider, as Google may have to pay to license rights it doesn’t directly own.
Adding further to the imbalance, Glass isn’t a mass produced product just yet. While large up-front investments are usually spread out over hundreds of thousands of units sold, Glass isn’t that widely distributed at this stage. Until recently, Glass has only been available to early-adopting “Explorers”, a select group of developers who were allowed by Google to buy the first versions of the device in April of 2013.
A Google spokesman highlighted the specialized nature of Glass units already sold in an email to PCmag.com, stating “The estimate is wrong. The Glass Explorer Edition costs significantly more to produce.” The April 15th sale this year marked the first time the general public has had access to Glass. A consumer version is expected to go on sale later this year, at a significantly reduced price.
Even at a lower price point, Glass looks likely to be a highly profitable endeavor for Google. Business Insider recently forecast that early adopters in specialized, “professional niches” will popularize the platform, helping to drive sales that they expect to reach 21 million units annually by the end of 2018. Even at a third of the current price, sales at that level could equate to a $10.5 Billion “annual market opportunity.” BI Intelligence also predicted that Google would quickly discount Glass, acknowledging that the high price of the tech remains the greatest barrier to sales growth. According to their models, the rate at which the price drops over the next five years will be the prime motivator in determining how readily the public adopts Glass.
Those interested in the full account of components in Google Glass and an estimate of costs can check out the itemized list at techinsights.com