Google Glass, the company’s latest piece of optical gadgetry, now retails exclusively in the States for US$1 500. This may sound reasonable for breakthrough wearable technology ,but a recent digital dissection performed by IHS discovered that the sum of Glass’s parts is only US$152.
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An example of the wearable technology was taken apart, with each component analyzed by IHS to calculate the approximate cost of production.
To put this injustice into perspective, Google Glass costs US$50 less to construct than an iPhone 5 (US$207), yet retails for nearly US$700 more (Apple’s launch cost was between US$199 and US$849). And usually it’s Apple taking flack for its pricing. Perhaps comparing a phone to a wearable is like comparing oranges and apples, but the comparison highlights just how inflated Glass’s price is.
As if the device and its users could be more hated.
The bouncer at Molotovs in SF where Sarah Slocum had her recent “Glasshole” incident… pic.twitter.com/TbDDRN68Vb
— Tom Foremski (@tomforemski) April 12, 2014
The high strength “titanium” frame is the most expensive component followed by the Glass’s novelty Taiwan-manufactured LCOS 640×360 screen. Without this screen, Glass would just be glasses.
Is this the kind of behaviour we should expect from a company that has “don’t be evil” as its unofficial motto? The company enjoys a near 90% margin on each sale. But senior director of cost and benchmarking for IHS Andrew Rassweiler suggests that most costs accrued come from “non-material” expenses, especially since it’s a new technology.
“As in any new product—especially a device that breaks new technological ground—the bill of materials (BOM) cost of Glass represent only a portion of the actual value of the system… [T]his is most dramatically illustrated in Google Glass, where the vast majority of its cost is tied up in non-material costs that include non-recurring engineering (NRE) expenses, extensive software and platform development, as well as tooling costs and other upfront outlays. When you buy Google Glass for $1,500, you are getting far, far more than just $152.47 in parts and manufacturing.”
Google can’t be too happy with this bad press. Those who’ve already purchased Glass are already being publicly shunned. This latest report won’t be changing the perception of Glass anytime soon.
Image: Ted Eytan via Flickr