Google Glass, which went on sale in the United States yesterday, has hardware and manufacturing at just over a tenth of its $1,500 (€1097) price tag, new research has claimed.
The report from IHS said that despite the low building cost of Google’s flagship wearable device, it would be amiss to assume every pair of glasses sold has a margin of around 90 percent.
Andrew Rassweiler, Senior Director, Cost Benchmarking Services for IHS, said: “As in any new product—especially a device that breaks new technological ground—the bill of materials (BOM) cost of Glass represent only a portion of the actual value of the system.
“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. When you buy Google Glass for $1,500, you are getting far, far more than just $152.47 in parts and manufacturing.”
The teardown revealed most of the integrated circuits that are included in the product are several generations old. The Texas Instruments OMAP4430 apps processor was made using 45nm semiconductor manufacturing technology, far behind the 28nm chips used in the latest flagship smartphones. In total, the semiconductor supplier accounts for 29 percent of the product’s bill of materials.
After the titanium frames, worth just over €16, the liquid crystal on silicon projector display is the second most expensive component, accounting for 15 percent of the bill of materials.
Rassweiler added: “Today’s Google Glass feels like a prototype. The design employs many off-the-shelf components that could be further optimized.
“If a mass market for the product is established, chip makers are expected to offer more integrated chipsets specific to the application that will greatly improve all aspects of performance, including processing speed, energy efficiency, weight and size. Future product revisions are sure to make strides in all of these areas.”