Google Glass—which sells for about $1,500—costs only about $152.47 to produce, according to a teardown analysis of the product conducted by the teardown analysis service at IHS Technology. But that doesn't mean Google is raking in a huge margin on each sale.
"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," said Andrew Rassweiler, senior director of cost benchmarking services for IHS.
Rassweiler noted that Google Glass is a dramatic example of a product where the vast majority of its cost is tied up in non-material costs that include non-recurring engineering 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," he said.
Google Glass carries a BOM of $132.47, according to IHS. When the $20 manufacturing expense is added, the cost to produce the head-mounted computer rises to $152.47.
The preliminary BOM cost includes only hardware and manufacturing costs and does not include other expenses such as software, licensing, royalties or other expenditures, IHS said.
For more details on the IHS Teardown analysis of the Google Glass, please visit the IHS Technology site.
Google Glass is not yet generally available through retail. The pre-mass-market status of Google Glass is evident by examining its design.
"Today’s Google Glass feels like a prototype," Rassweiler said. "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."
Most of the chips Google Glass uses are older when compared with those found in recent flagship smartphone designs. For example, the Texas Instruments Inc. (TI) OMAP4430 apps processor used in Google Glass is made with 45-nanometer (nm) semiconductor manufacturing technology—two generations behind the 28-nmchips employed in the latest flagship smartphone, according to IHS.
The frame of the Glass —which costs about $22—is the single most expensive component of the product, representing about 17 percent of the BOM, according to IHS. The frame is made of titanium, a durable and expensive material used in high-performance military aircraft and in some eyeglass frames. Titanium is rarely used in commercial electronic devices analyzed by IHS, the firm said.
"The frame is just one aspect of how Google is presenting Glass as a premium product," Rassweiler said. "The quality of the packaging and accessories, along with how the box contents are staged, gives the whole Google Glass experience a very high-end feel and appeal."
The second most expensive single component in Google Glass is also its most defining feature: its head-mounted liquid-crystal on silicon projector display (LCOS), IHS said. The firm estimates the cost of LCOS—made by Taiwan’s Himax Technologies Inc. at $20—represents about 15 percent of the total Glass BOM.
According to Rassweiler, the LCOS is the most important component of the product. "Just as e-readers wouldn’t exist without their e-Ink screens, Glass wouldn’t be possible with the LCOS display," he said. "The display is pretty slick, providing a near-eye viewing experience that must be seen to be believed."
The IHS teardown analysis found that TI components dominate the Google Glass design. TI parts inside include the apps processor, power management IC, audio codec, battery fuel gauge and regulator ICs, IHS said. Altogether, TI accounts for an estimated $37.90 worth of components identified so far in the Glass, or roughly about 29 percent of the BOM, according to IHS.
Google Glass also includes two accelerometers—one from STMicroelectronics and another from InvenSense Inc., IHS said. Accelerometers are commonly used to detect motion in electronic devices, such as smartphones and video-game controllers.
IHS said smartphones generally incorporate just one multi-axis accelerometer. The firm said the use of two accelerometers in Google Glass represents an interesting and unusual design choice that it plans to investigate further.