It was news a couple weeks ago when a teardown firm took Google Glass apart and estimated its parts were worth $80. Via an invite-only test program, the wearable computing device costs $1,500.
While Teardown.com noted this was a first take and a full analysis would come later, Google retorted that the low base cost was “absolutely wrong.”
So when market research firm IHS — whose device teardowns we regularly run — took a closer look, we were interested to see its conclusions.
IHS did find that Glass is made with generic and off-the-shelf components, and that the processor and other parts are 2012 vintage. The bill for these materials would cost an estimated $132.47, with another of $20 for assembly costs.
The single most expensive part of Glass in the IHS analysis is the titanium frame that wraps around the wearer’s head, with a cost of $22. Coming in at $20 is the most crucial element of the device — the liquid crystal on silicon projector display which is assumed to be from the supplier Himax. The processor is a Texas Instruments OMAP4 chip based on a Cortex A9 core designed by ARM Holdings, which goes for $8.85.
While $152 is still a lot less than $1,500, IHS had some ideas about where Google is spending additional money. Google has yet to say what the retail price of Glass will be, or when it will go on sale to the public.
Many costs of Glass aren’t included in a traditional teardown, noted IHS analyst Andrew Rassweiler. The device is “staged to be a million-dollar listing,” he observed with admiration, with a sleek box, a beautifully stitched custom carrying case, and a fancy custom charger.
Doing a teardown for a first-generation device that hasn’t been widely released is a tricky prospect. “I wouldn’t expect any integrated circuit manufacturers to come on board because frankly it’s an untested market,” Rassweiler said. “It’s par for the course; it’s not to knock Google. We saw this in the early e-readers. Any time a new product comes along, the only way you’re going to do it semi-affordably is to work with off-the-shelf components.”
Even though IHS was assuming some 50,000 Google Glass were made, it thought Google would have been able to negotiate somewhat reasonable prices because of its power as a company. However, Google still would have had to pay millions of dollars in tooling costs, and it’s also assembling the devices in California.
And the Google X division also developed the very novel device from scratch, along with the software to run it.
“My point is: Google spent a lot of money on this project,” Rassweiler said. “I don’t think this should be interpreted as Google gouging the customer. Costs are difficult to assess with the production being so limited. But even if they were paying triple our estimate, that’s not the costs.”
But this is a teardown after all, and given the $152 number, a spokesman for Google Glass was quick to reject it. “While we appreciate another attempt to estimate the cost of Glass, this latest one from IHS, like teardown.com’s, is wildly off,” he said. “Glass costs significantly more to produce.”