1000% Markup On $1500 Google Glasses?
On sale for a cool $1500, Glass costs just $152 to make.Since yesterday, Google Glass, its wearable glasses (Explorer ed.) went on sale to the general public in the US, having been locked in a closed beta Explorer program for yonks.
“Starting today anyone in the US can buy the Glass Explorer Edition, as long as we have it on hand,” Google wrote on a blog.
“We’re ready to keep meeting new Explorers, and we can’t wait to hear all your experiences and feedback to continue to make Glass even better, ahead of our wider consumer release.” It is being sold in various shades and frames. No word when it will go on sale outside the US yet.
But it also emerged this week that the Google specs, which sells for a steep US$1,500 costs just $152.47 to make, according to a teardown conducted by IHS.
The wearable device is made up of various sensors, processors, head-mounted liquid-crystal on silicon projector display, and a snazzy titanium frame.
“The vast majority of its cost is tied up in non-material costs that include non-recurring engineering expenses, extensive software and platform development, as well as tooling costs and other upfront outlays. When you buy Google Glass for $1500, you are getting far, far more than just $152.47 in parts and manufacturing,” says Andrew Rassweiler, Senior Director, IHS.
This bill of materials came to $132.47 plus $20 manufacturing cost.
However, it is obvious development and testing costs (engineers don’t come cheap) were significant, but 1000% mark up on the ‘premium’ product’, which is basically like wearing a smartphone on your head, is questionable.
The pre-mass-market status of Google Glass is evident by its design, says IHS who reckon the Glass when it is widely available will be faster, smaller and more energy efficient.
The titanium frame is just one aspect of how Google is presenting Glass as a premium product, says Rassweiler noted.
“The quality of the packaging and accessories, along with how the box contents are staged, gives the whole Google Glass experience a very high-end feel and appeal.”