Teardown.com took apart a $1,500 pair of Google Glass(s goog) and published estimates of the final bill of materials on Wednesday. The bottom line? Glass components cost an estimated $79.78, or a little more than 5 percent of its retail price. Google shot a quick statement to the Wall Street Journal, calling the estimate “absolutely wrong.”
Teardown.com is not the first to take apart a pair of Glass. We’ve known what’s inside Glass since at least last June, when the second wave of Glass availability led two privacy-concerned engineers to take apart the wearable. What Teardown.com has done is compare individual parts to the wholesale component market and estimate the cost of the device as a whole — and they’re not the only ones saying that Google Glass is not expensive to manufacture.
Last August, my colleague Kevin Tofel noted the components in Google Glass are strikingly similar to the Motorola MotoActiv smartwatch that came out in early 2012. Using those components as a baseline, he estimated Google Glass to potentially cost as much as $225:
“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.”
While $225 is nearly three times the amount that Teardown.com estimated, the two guesses are still in the same ballpark, especially compared to the $1,500 list price for a pair of Glass.
There are a variety of reasons why Google could have said the cost estimate is “absolutely wrong.” Glass’ dime-sized 640 x 360 display needs some pretty unique optics, and could conceivably cost significantly more than the $3 teardown.com estimated. The estimate did not include research and development costs, which include entire teams of developers and engineers, most likely handsomely paid. And finally, the comment could be reflexive pushback to unflattering news.
Regardless of minor differences between cost estimates, the bottom line is clear: Google Glass’ price seems to have little to do with the marginal cost of producing a new unit. The rollout was not designed to get them in as many developers’ hands as possible. Instead, the entire Glass rollout process was a series of PR stunts meant to give the devices the appearance of a uncommon luxury good by ensuring only hardcore gadget geeks could get their hands on a pair due to high price and low availability. As Glass marketing chief Ed Sanders told Forbes earlier this month, “The high price point isn’t just about the cost of the device. We want people who are going to be passionate about it.”
On the other hand, the inexpensive bill of materials means that when Glass is eventually released to the public, maybe it’ll be priced so you can actually afford a pair.