With a $1500 price point, many people consider Google Glass way overpriced. Now that information has come out that the technologically advanced eyewear is made up of less than $80 in parts, Google may see sales drop off drastically, questioning the high price laid out for the new product.
Google placed the high price point with the expectation that over the next four years the price would fall as demand increased. In the next four years the company expected to see the price cut in half and sales to reach 21 million devices by 2018. The word that the eyewear based computer costs less than $100 in parts is already starting to sour consumers.
The breakdown of parts may shock consumers even more. A Texas Instruments processor is the most expensive part of the device coming in at $13.96. The 16-gigs of flash memory from Toshiba comes in at $8.18, the camera costs only $5.66 and the display is amazingly cheap at $3. Add in the frame and various other components to tie Glass together, the total cost of parts comes to $79.78.
The word that the parts make up only five percent of the price of Google Glass may appear way overpriced. However, there are other factors that determine the cost of the devices. The design of Glass is one factor, as is the software design needed to make it all work. Add in marketing and the cost to assemble the parts and package them for sale and it all adds up.
Google may have been a little too ambitious setting the price point so high. The limited first release from the company’s experimental division called Google X, is being used as a test run for the devices. It is expected that when Google Glass goes on sale worldwide the price will drop. Now with word that the parts only add up to $80, the question floating around is how much will the devices will cost consumers when they hit the market. The original expectation was around the $500 to $600 range.
Consumers with the knowledge of the cost of parts to build Glass may shy away from the technology if the cost is too high in their opinion. For the company that brought the affordable laptop computer to the masses with the Chromebook, anything thought to be overpriced may be avoided at all costs. If Google Glass would hit the mass market at a $200-$300 price point, the company may find a demand exceeding all expectations.
Before complaining too much about how $1500 seems way overpriced for Google Glass, you can try them for free. Actually, for a $50 deposit, Google will send consumers a nonfunctioning unit to try for 10 days. This gives the consumer a chance to get a feel for wearing the device and determine if they are willing to shell out the extra money for a working device. Since Google Glass is worn and puts a tiny screen so close the eye of the wearer, there is the possibility that it will not work for everyone.
By Carl Auer