A recent teardown has revealed what hardware Google Glass features on the inside and that it’s priced at just below $80. This has created a lot of buzz in the Google Glass communities, as people don’t understand why the company is asking $1,500 for a $80 device.
As you can see in the title, this is an opinion piece and we will try to find out the implications of this price by doing a bit of research about this device.
Taking it for granted that Teardown.com’s prices are real, it means that Google only spends less than 10% of Glass’ price on hardware, while the rest is either profit or spent on research, development, employees and support.
Considering that Google Glass is the first of this kind of devices, the amount of research done for it must have been huge and it’s probably costed Google tens of millions if not more. If they ever want to recover the money from the price of the device and considering it’s still built-in limited numbers, then it wouldn’t have any chance if they only made a few tens of dollars with each one. But there’s one more thing.
I don’t believe Google is looking to make any profit with the current versions of Glass and there are some reasons for this. The amount of devices they are selling is very small to look into profits and it’s still in a beta phase, which means they probably aren’t even sure themselves where Google Glass is heading to.
My take on the decision to price it at $1,500 is that they don’t want everyone to afford one, so people who really need it can buy it. If Google Glass was priced at $100, everyone wanted one and Google might not be able to manufacture so many.
Along with all of this, there’s probably the biggest reason for the ridiculous price. Google Glass is still in a beta phase, which means it’s buggy, it breaks in a lot of weather conditions and the overall user experience is not very satisfying yet. If regular users would use it, they would probably cause a lot of negative marketing for the company. The difference between the regular user and developers is that the latter understand what beta means and that it’s not a finished product.
In the end, Google might also prove that the $1,500 price tag wasn’t ridiculous at all. The company has already exchanged the first version of Glass with the v2 for free and I am pretty sure they will do the same once the customer edition gets released. So early adopters won’t have to empty their pockets to get their hands on the future releases.
People have been complaining that they didn’t offer it cheaper or for free to a limited number of developers, as they did with CR-48, the Chromebook prototype. But I believe they wanted to have a larger user base than the CR-48, as it’s a much more complex device and it requires apps, while Chromebooks work with the apps that are already available for Chrome.
My opinion is that the price is justified and early adopters will have benefits in the future too for the price they paid. I really don’t believe Google charges $1,500 to make any profit. They will probably look into profit once they can ship millions of devices yearly