Recent reports have surfaced as to the component costs, or hardware and manufacturing, for Google Glass. Teardown.com tore the device apart and determined that this cost amounted to just about $80 for the components. IHS Technology also ran a teardown analysis of the famed headset and determined that the total cost to Google was around $150. In other words, Google’s expenses to physically produce the device amount to about 10% of its current price, $1,500 plus tax.
While this figure can cause sticker shock to some, or even concern that Google is sticking it to the consumer even during its early product-testing phase, there are other major costs that are not accounted for in the physical production of the device. IHS estimates that that the majority of Google Glass’ costs come in the form of engineering expenses, software, and platform development.
Nonetheless, these figures are just estimates. Without understanding true sourcing, labor, or engineering costs, companies like IHS and Teardown.com can only produce their best estimates as to Google’s true cost. On that note, Google has vehemently denied the accuracy of these cost estimate studies, and hasn’t hinted at releasing any sort of price info any time soon. According to the Wall Street Journal, a Google spokesman made the following statement,
“While we appreciate another attempt to estimate the cost of Glass, this latest one from IHS, like Teardown.com’s, is wildly off…Glass costs significantly more to produce.”
Regardless of the costs, a recent Google initiative allowing any users to buy a pair of the devices for a one day window, proved wildly successful, showing that even if Google does have only 10% material costs, consumers are still interested enough to pay them for it.