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Why Google Glass costs $1,500 now and will likely be around $299 later (Updated)

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If the $1,500 price tag for Google(s goog) Glass is a budget buster for you, don’t give up hope just yet. When the wearable gadget arrives on the consumer market it could cost as little as $299 according to Topology Research’s Jason Tsai, as reported by The China Post and Phone Arena.

Obviously, that would be a drastic price drop from the current cost of Google Glass, which was limited to roughly 8,000 Glass Explorers. I think Tsai is far more right than wrong, however, for two reasons.

motoactv-featuredFirst, let’s consider the cost of the components in Google Glass. Outside of the special display and bone conducting speaker, just about all of the same parts are in the Motorola MotoActv smartwatch I bought in early 2012.

It has all of the same sensors, 8 GB of flash memory, a touchscreen, GPS, Wi-Fi and Bluetooth radios. That device cost me $199 and I’m sure the parts for it today are priced far less. And that $199 price tag had some profit margin built in, so the actual bill of materials was likely in the $100 to $150 price range.

Adding in the display to Google Glass will contribute between $30 to $35 in costs, says Tsai. He also notes that this component “will account for the biggest share of the total cost in the near term,” meaning the bone conduction speaker would cost even less to add. It’s also worth a mention that Google recently took a 6.3 percent stake in Himax, the display supplier for Glass: That could help build out production facilities and lower the cost per unit.

Let’s go with the worst case though: $150 for all of the internal parts plus $35 for the display and another $40 — likely a high estimate on my part — for the speaker component and a camera sensor. That brings us to a conservative $225 figure. Of course there are costs involved for the actual wearable part as well as production. Even so, $299 doesn’t sound out of the realm of possibilities. We’re not looking at the chips and memory that are needed to make a $600 smartphone here.

The second reason I think Tsai has a valid point is that $1,500 is clearly an artificially inflated price for what Google Glass is. I’m not suggesting it isn’t worth it for the early access, but Google did something smart when it decided to pick a price. The $1,500 cost weeds out the potential Google Glass audience so that the only people who will spend the money are those sincerely interested in wearables and mobile technology.

Google Glass

This reduces the chance of people using Glass and simply dismissing it because they don’t understand it. Why kill a product with bad reviews when the reviewers may not understand the technology, its potential impact, or the fact that it’s a work in progress?

Google can’t afford that situation with Glass because both the wearable gadget market is starting to take off, as is contextual computing. Glass is a big bet for the company as it looks to expand the types of user data it can gather. That doesn’t mean, however, that Glass will be a big budget item when it goes on sale, perhaps as early as late 2013.

Update on Aug. 9, 1:49pm PT: After publishing this story, I heard from sources close to Google suggesting that for the consumer launch time, the price of Google Glass won’t be as low as $299 but less than $1,500.

32 Responses to “Why Google Glass costs $1,500 now and will likely be around $299 later (Updated)”

  1. It’s like to improve google’s product, one has to pay them $1500. It should have been free for beta program. Provide the glasses to different kinds of consumers, google expects more sales from to get their reviews.

  2. Yudha Noor Aditya

    Not the components that make it expensive.. but the technology behind it. Sure, since its beta, i think they’re looking for really interested customers. Then those money will be used to enhance the performance of the Glass, until it ready to be sold to wide public. Later at that time, I’m quite sure the price would be lowered though.

  3. GreatDaneHugs

    I already acknowledged that its Google’s beta program, and they can do as they please. Your university beta program is inappropriate as an analogy b/c b/c you are separating the beta program and $1500 admission price; they are not mutually exclusive.

    If the Glass explorer program was $1500 OR you are passionate about tech, then that’s fine. But it’s clearly an AND condition. And in fact, someone could have been at Google IO, been not interested in tech but there b/c of work demands and bought one.

    As such your opinion boils down the the fact that “it’s a smart strategy for a product to price it at $1500 for a beta program”

    If Android is the platform for everyone, then why is it that one of the most exciting technologies within the Android space is only available to those who have $1500 in disposable income to spend, and those wealthier individuals will be the ones who have the undoubtedly greatest input into shaping the device and its future iterations? To me that seems very inconsistent with the Android mission / goals which I am proud to support.

    I know a lot of highly motivated quality technical beta testers who would would do well testing the Glass Device and I know for sure they don’t have the means. I’m just glad I’m able to offer them ample opportunities to play with smartphones / tablets etc. and pique their interest into hacking etc when I help out / volunteer my time. However these kids / teens who are smart and are our future generations are excluded from this beta program on PRICE only. In no uncertain terms is this a SMART strategy.

    • I appreciate the thoughts here. I only used the university beta program because it was your example. ;)

      Believe me I understand your points and respect that you have a different opinion. I’m not saying I like that Google is charging $1500 for Glass; my opinion as a consumer is likely different than Google’s business plan here.

      I do have one question though: Would you feel any different if Google put this out as a $1,500 Kickstarter project?

      I’m just not sure how Google can build, support and develop for Glass in beta at a very low cost. It’s a VERY active project that the company is trying to quickly mature based on developer and Explorer feedback.

      That’s not cheap and it requires the participants to be equally active. If anyone could buy Glass, there’s no guarantee they’d be a good beta candidate, which was the point I was trying to make.


    • A.P. Mucundh

      I agree with GreatDaneHugs. The young students in our high schools and universities are the Future Digital Generation of the population. They are tech-savvy and can do very useful and meaningful Beta Testing of Google Glass. Or any other new tech device for that matter. They have this Hunger for gadgets and gizmos. Not the richie rich people. I agree that the wealthy folks can buy several of these Google Glasses. Folks like Wall Street millionaires, bankers and the CEOs of Corporations. But do these busy – and yes rich – people have the time and enthusiasm to test out a new technological innovation like Google Glass? NO. That is a No-Brainer. Kevin Tofel (with my due respects to you) has overlooked the hidden costs of the R & D investment that went into making Google Glass a reality. One can discuss this subject till the cows come home. But no one really knows what is happening inside Googleplex and how many millions they have spent in the development of this exciting, amazing techie gizmo.

  4. GreatDaneHugs

    This is possibly the stupidest statement ever:
    “Google did something smart when it decided to pick a price. The $1,500 cost weeds out the potential Google Glass audience so that the only people who will spend the money are those sincerely interested in wearables and mobile technology”

    Does that mean that Colleges / Universities are smart for continuing to raise tuition, and that only people who are interested + can AFFORD college should have a higher education?

    The sentiment is senseless and borderline demeaning. If Google wants it exclusive then fine, its their right. But to try to put a positive spin on it by saying that those who really want it is wrong; I’ve read a story about a Google Glass guy who returned it on the basis of price / affordability. I would love to buy the Google Glass myself and I have the disposable income to do so…but to say that only those who were “interested” would get it is a PR positive spin too far that’s not very objective…

    • I understand your point, but lets look at your example: Are colleges & universities running a beta program to make a better educational experience?

      No. Google has created the Explorer program to get a group of highly motivated external beta testers using the product. That’s not PR spin; that’s a smart strategy for the product in my opinion.

  5. TA_Edison

    I saw someone wearing one last week, and what was interesting, was…

    Not seen in all the released photos is a larger part of it which hangs over the rear of ones ear. Yes, there is much more to the device. This is why the best photos of it are of attractive women with nice hair covering up what is probably the large battery in the rear.

    So from it I can see that wearable computing HAS to be built with total STYLE in mind. If there is no style, there will be no customers. Wearable computing will be a case of style over substance.

    IMHO, the guy (I saw) wearing the glasses looked like an idiot. There was zero indication of what they could do, or were doing.