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Teardowns confirm $1,500 Google Glass hardware is DIRT CHEAP

But that's not what you're paying for...

Internet Security Threat Report 2014

Yet another analyst firm has placed a low price tag on the hardware comprising Google Glass headsets.

Researchers with IHS said in a teardown analysis of the augmented reality platform that each headset contains a bill of materials (BOM) of $152.47.

According to IHS, Google uses parts that cost $132.47 per Glass headset, while an additional $20 charge would come from the cost of manufacturing the device. Glass is currently being offered in limited quantities at a cost of $1,500 each.

Among the costliest pieces in Glass is its frame, which IHS estimates to be a titanium casing costing $22. Other hardware includes $20 for the Glass' LCOS panel display and $12.50 for casing, charger, USB cable, and earpiece.

IHS's number fall generally in line with what other analysts have been estimating to be the BOM for Google Glass. An April teardown from analyst house TechInsights suggested that Glass cost hardware as little as $80, while a Taiwanese analyst believes that Google would be able to charge as little as $299 and still turn a profit.

Google, while not providing specifics on what it pays per unit, has dismissed suggestions that building Glass carries such a low cost to the company. Indeed, analysts freely note that teardown estimates fail to account for the considerable costs of research and development.

IHS senior director of cost benchmarking services Andrew Rassweiler noted that Google's $1,500 price tag reflects not just the cost of developing glass and procuring the hardware, but also setting up the infrastructure to build, sell, and support a brand new device.

"IHS has noted this before in other electronic devices, but this is most dramatically illustrated in Google Glass, where the vast majority of its cost is tied up in non-material costs that include non-recurring engineering (NRE) expenses, extensive software and platform development, as well as tooling costs and other upfront outlays," Rassweiler said.

"When you buy Google Glass for $1,500, you are getting far, far more than just $152.47 in parts and manufacturing." ®

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