Google Glass made of cheap parts but sold at premium price, says website

Have we been had or is the price really encompassing more than the sum of its parts?

Google Glass was a pricey proposition from the start at US$1,500 but here’s the rub: Teardown.com claims that Glass’s hardware costs nowhere near that.

It obtained its own Google Glass piece and then took it apart just to see what it was made of and how much it cost to make.

You want to know how much Teardown’s estimate came to? US$80. And Google Glass goes for US$1,500. Now Google reps claim the estimate is wrong but the thing is, you can’t lie or dispute what the hardware is. Maybe the markup is due to the cost of creating supercool software, the testing, the patents that may or may not have been used.

Why the markup, Google?

Here is the breakdown:

  • Processor: US$13.96
     
  • Camera: US$5.66
     
  • Battery: US$1.14
     
  • Display component: US$3 (says Teardown) or US$30-35 (Topology Research Institute)

Even GigaOM found that Glass has mostly the same parts as Motorola’s 2012 MotoActv smartwatch. Currently the most generous estimate of how much Glass costs to make is US$225.

Anyway you slice it, Google is making quite a healthy profit margin from each Glass eyewear. Now here comes the reasoning behind the expensive price: that setting a high ceiling price is the only way to choke demand and to ensure exclusivity.

You’re not paying so much for the hardware as you are paying to be a member of the Glass Explorer program. But it still is misleading to state that you’re paying for the hardware when it would be better saying that you’re paying to join an ‘elite’ group of testers of technology.

[Source: PandoDaily]

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