What is the true cost of Google Glass?
While the connected eyewear device sells for $1,500, a new "tear-down" report says the needed materials cost just $80, according to CBS News.
But don't condemn Google too quickly. By Teardown.com's estimations, the most expensive component in Google Glass goes for $13.96, and the device costs $79.78 to manufacture, assemble and test; however, Google's hidden expenses likely cost more much more.
Tear-downs involve taking a new product apart and estimating how much the components cost. The practice is becoming "a near sport in high tech" and generally illustrates the gap between the cost of materials and the price of the final unit, CBS News reported.
Despite examples like the iPhone, which has a wide gap between component costs and price, tear-downs have to be taken with a grain of salt. Mass market products are usually the subject of tear-down projects, which can't factor in the work and research needed for the initial product design.
Engineering, design and the first costs to manufacture a product are all hidden expenses that companies spread over the sales of hundreds of millions of units. While Google hasn't revealed its Glass sales figures, recent estimates put the device in the range of 10,000 sold.
With an estimated cost of $10 million to develop Glass and begin production, the device would cost $1,000 per unit, CBS News said. While tear-downs can look at individual components, they can't necessarily reflect design and engineering expenses.
Don't feel bad for Google though--if Glass sales reach into the millions, the company recently valued at $400 billion could be bringing in even more profit.
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