Google Glass Parts Estimated to Cost Less Than $80

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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A recent teardown of Google Glass by TechInsights’ Teardown.com revealed what we all secretly suspected: (1) There’s no magic smoke in there and (2) the collective cost of the individual parts doesn’t amount to that much money. Not much in this case amounts to around $80 bucks. $1500 bucks for the Explorer model? Not a bad profit at all. :eek:

Beyond the components, the cost of manufacturing Glass–squeezing all these things into a small, wearable device–may add a lot more to Google’s costs.
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As the article mentioned there are likely other costs associated with the product (R&D, etc) that extend beyond the material costs. Also, there seems to be an erroneous assumption on how much profit is acceptable. A prototype product like this is going to have a higher pricetag targeted at early adopters. This allows the company to recoup some of their investment, as well as limiting the market for a new product until they get the kinks out (and there are still a few kinks legally, if not technically, with GG)

As to the question of cost and profit, any sensible company will make as much profit as the market will bear (unless they are a non-profit company) ... whether the company is charging excessively shouldn't matter unless they have a captive market (ISP, Electric, Utility, etc) and they are the only source for a mandatory purchase (then the profit matters) ... otherwise, in Yoda speak, "Buy or Buy not" but don't complain about what it should or shouldn't cost :)
 
MajorDomo said:
A recent teardown of Google Glass by TechInsights’ Teardown.com revealed what we all secretly suspected: (1) There’s no magic smoke in there and (2) the collective cost of the individual parts doesn’t amount to that much money. Not much in this case amounts to around $80 bucks. $1500 bucks for the Explorer model? Not a bad profit at all. :eek:
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Incredibly naive, no offense Steve. Have you heard of a thing called R&D?
 
That's not Steve. On the weekends in this forum, another person posts the news. If you read his forum name, you can tell its another person.
 
Thanks Mr. Helper -- I see now that its Majordomo.
 
(1) Neither Steve or myself writes the news stories, we direct you to them with a lead in and (2) I've only been doing the weekend news for going on five years, looks like someone would have noticed me by now. :D

DPI said:
Incredibly naive, no offense Steve. Have you heard of a thing called R&D?
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MajorDomo said:
(1) Neither Steve or myself writes the news stories, we direct you to them with a lead in and (2) I've only been doing the weekend news for going on five years, looks like someone would have noticed me by now. :D
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Your excuses are your own, Antonio. ;)
 
kbrickley said:
A prototype product like this is going to have a higher pricetag targeted at early adopters. This allows the company to recoup some of their investment, as well as limiting the market for a new product until they get the kinks out (and there are still a few kinks legally, if not technically, with GG)
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This exactly. They don't want the average person to get their hands on it. The thing hasn't even been released yet.
 
For every dollar they've spent on the hardware, they've probably spent a hundred or more times that on developing the software - that is their basic business after all. That doesn't make the current price of Google Glass reasonable for the average consumer of course, but as has been noted it isn't yet supposed to be.
 
Babbster said:
For every dollar they've spent on the hardware, they've probably spent a hundred or more times that on developing the software - that is their basic business after all. That doesn't make the current price of Google Glass reasonable for the average consumer of course, but as has been noted it isn't yet supposed to be.
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Exactly, well said.
 
Babbster said:
For every dollar they've spent on the hardware, they've probably spent a hundred or more times that on developing the software - that is their basic business after all. That doesn't make the current price of Google Glass reasonable for the average consumer of course, but as has been noted it isn't yet supposed to be.
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So $80 x 100 = $8,000! :eek: That's pretty cheap to develop!
 
jpm100 said:
You don't try to recoup all your R&D in the first batch of product.
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They realized nobody wants any of this wearables crap, so they're recouping their money by milking the tech douchebags and hipsters who are gullible enough to buy it.
 
I think what some of you are missing is that this also pays for everything else that has to do with glass. IE: The signage, The people who put them on on for you and train you when you get yours, yes the R&D, the cost tooling for the limited runs, the people who are trying to find the best way to mass produce them, the designers, the partnerships with oakley and ray-ban, and others, as well as the employees working on that side of things.

The initial group of 8000 for $1500/ person, ends up at around 12 million. Its been a year since it was launched and was probably several years in development. They have to support all the "explorers" beta testing the device, as well as do R&D on the final device. I think of it as a way for crowdfunding.
 
I am tired of people claiming R&D costs, its google, MS, apple multibillion dollar companies all with 10s of billions chilling in the bank. The R&D for a product is going to be spread out over years to decades for the investment. I don't pay $1500 for windows just because the R&D costs are high. That argument is idiotic. Google plans to make these product for years to come like almost all products the actual price is loosely based on the BOM not the R&D in almost all of these product categories. In addition to that the reality is even at $1500 googles volume is so low that it is probably not even coming close to recovering the R&D either. That is part of why the R&D argument is so stupid. The R&D for google glass is an investment with a payout in patents, a head start and possibly decades of products based on this work.

The only argument for high cost is if there is some reason that manufacture or assembly on google end is turning out to be very difficult. Maybe only 1 out of 10 of these is able to be sold.

The reality is very different google wants to try to create a premium product and create buzz around the price. People will want to say I want that dorky thing on my head because it screams I can throw $1500 at a blue tooth ear piece I am so rich.
 
DeathFromBelow said:
They realized nobody wants any of this wearables crap, so they're recouping their money by milking the tech douchebags and hipsters who are gullible enough to buy it.
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That's not even remotely true. The real douchebag is you, for calling every other person like me who wants one a douchebag because you don't like Glass. Its one thing to not like a product, its another to call people douchebags because they do.
 
Maybe they are doing what Apple always does, jack up the price to give them an "elite" reputation, or make the owners feel special for owning such an expensive hardware.:p
 
Hornet said:
Maybe they are doing what Apple always does, jack up the price to give them an "elite" reputation, or make the owners feel special for owning such an expensive hardware.:p
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Yeah, its not to recoup costs although its probably welcome. Its for some ulterior purpose like to limit demand and/or give an elite appearance. I bet a lot of people are pissed especially freelance and amateur tech reviewers who felt compelled to buy one to keep up with reporting on the latest tech.
 
For those of you that didn't see this one over the weekend, there is a new report claiming Google's $1,500 Glass only costs $80 to manufacture. :eek:
 
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80 bucks to manufacture, a few million bucks to develop. But who cares about dev costs, right?
 
B00nie said:
80 bucks to manufacture, a few million bucks to develop. But who cares about dev costs, right?
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Do the math and you'll see the consumer is still getting screwed so Google can eventually make 800%-1000% profits. Apple is notorious for this with the iPhone. Stop thinking these tech companies are innocent do-gooders.
 
PCunicorn said:
That's not even remotely true. The real douchebag is you, for calling every other person like me who wants one a douchebag because you don't like Glass. Its one thing to not like a product, its another to call people douchebags because they do.
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I just dont see a point in owing glass. Your phone does almost everything glass does,why have two devices that do the same thing? Same with smart watches,those are just dumb.
 
jpm100 said:
You don't try to recoup all your R&D in the first batch of product.
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Except this isn't a high volume product that you can also link into say a contract like phones. So the margins have to be large. Niche product niche pricing.
 
jpm100 said:
You don't try to recoup all your R&D in the first batch of product.
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That depends on how yo conduct business. If this has any infrastructure and is viewed as risky, pricing may have to account for operation of that infrastructure. Outside of that, pricing may fully respect the supply and demand curve, just with the intention of reducing demand.
 
Remember the shitstorm that occurred with Apple (iPhone I believe) users who had a major price drop and they were upset they paid a premium price just X months earlier? :D

That said, $3 for the screen? I know the resolution isn't super large but it's like half a square inch of that resolution, not a 4" phone screen.
 
shade91 said:
Do the math and you'll see the consumer is still getting screwed so Google can eventually make 800%-1000% profits. Apple is notorious for this with the iPhone. Stop thinking these tech companies are innocent do-gooders.
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Stop thinking these tech companies aren't allowed to profit from their work.
 
shade91 said:
Do the math and you'll see the consumer is still getting screwed so Google can eventually make 800%-1000% profits. Apple is notorious for this with the iPhone. Stop thinking these tech companies are innocent do-gooders.
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You know who's really getting screwed is Google, because those $80 parts are made from practically valueless amounts of sand, oil, and (trace) precious metals. Whoever is selling those components to them are clearly making infinite% profit.
 
To those saying that "Well they have to pay for R&D costs" etc.....

The PS4/Xbone cost SONY/Microsoft billions to develop and design, and they're selling them AT A LOSS, the hardware they are putting into them is more expensive than what they are selling it for

Selling $80 of hardware for $1500 is just fucking highway robbery, and Google trying to bank on people's stupidity. Look no further than Apple who sells iphone's which contain $150-200 of hardware, but sell for retail at $800
 
This is great news, that means when $150 Chinese knock-offs come to market they'll be of nearly the same quality. :D
 
jpm100 said:
You don't try to recoup all your R&D in the first batch of product.
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It's atypical, sure. But hey, when you've got a niche product that a bunch of techie hipsters with more money than brains will buy at insaneo prices, why not?

B00nie said:
Stop thinking these tech companies aren't allowed to profit from their work.
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+1

It's like people think a company is obligated to sell their wares at a markup they consider reasonable. Turns out, they can charge whateverthefuck they want for it.
 
Semantics said:
Except this isn't a high volume product that you can also link into say a contract like phones. So the margins have to be large. Niche product niche pricing.
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1800% profit is more than jewelry.
 
PCunicorn said:
That's not even remotely true. The real douchebag is you, for calling every other person like me who wants one a douchebag because you don't like Glass. Its one thing to not like a product, its another to call people douchebags because they do.
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Where did I call everyone who's interested in glass a douchebag? My statement was that Google knew there were a lot of tech douchebags who would pay $1500 for the attention glass would get them. Look at the news coverage, it goes from Robert Scoble in the shower being an attention whore to reports of glassholes being assaulted, ticketed, and/or thrown out of bars.
 
even if they sold these stupid things at 80 bucks i would never buy one. it just screams look at me im a douche bag. no thanks.
 
ShamisOMally said:
To those saying that "Well they have to pay for R&D costs" etc.....

The PS4/Xbone cost SONY/Microsoft billions to develop and design, and they're selling them AT A LOSS, the hardware they are putting into them is more expensive than what they are selling it for

Selling $80 of hardware for $1500 is just fucking highway robbery, and Google trying to bank on people's stupidity. Look no further than Apple who sells iphone's which contain $150-200 of hardware, but sell for retail at $800
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They sell it at a loss, but that doesn't mean that Microsoft or Sony aren't making money off of them somewhere else. They get money from all games (Percentage), the Live service, and other crap they sell you. Same for Sony.

If they really sold it at a total complete loss, they would not be doing it, but they know they can sell it at a loss cause they get your money in other places lol.
 
I'll buy one when the glasses actually look like glasses. Which is only a matter of time really.
 
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