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Google Glass Now Selling to the U.S. Masses

Google Glass Now Selling to the U.S. Masses
By Jennifer LeClaire

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Glass is not a mainstream product but Google may be able to sell a meaningful number of these headsets. One way that Google could sell more Google Glass units immediately is to lower the price. If Google wants to move more volume it can make Glass cheaper and that would translate into more demand and sales, said analyst Greg Sterling.
 


Want to be an Explorer? Well, if you do, Google wants you, too. That’s right, after a 24-hour sale last month, the wearable technology maker is once again opening up Google Glass to the masses.

Google Glass is still in the Explorer Program phase of the roll out, which relies on so-called Explorers to test and offer feedback on the wearable tech. The company is allowing anyone in the U.S. to buy the Glass Explorer Edition as long as supplies last.

“Last week we told you we'd be trying out new ways to find Explorers. Well, we weren’t kidding,” the company said on its Google+ page. “We learned a lot when we opened our site a few weeks ago, so we’ve decided to move to a more open beta.”

Is it a Rip Off?

The cost of entry is not cheap, though. It will cost you $1,500. Some consumers may feel that’s an unfair price considering a new revelation from market research firm IHS. The company’s teardown analysis of Google Glass reveals that the hardware and manufacturing costs total a mere $152.47.

But does that mean that Google is pocketing a sky-high margin of 90 percent on each Glass sale? Not by a long shot, the company said, because you are getting far more than parts and manufacturing.

“IHS has noted this before in other electronic devices, but this is most dramatically illustrated in Google Glass, 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,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS.

Making Strides

Rassweiler went on to say that today’s Google Glass feels like a prototype -- the design employs many off-the-shelf components that could be 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,” he said. “Future product revisions are sure to make strides in all of these areas.”

We caught up with Greg Sterling, principal analyst at Sterling Market Intelligence, to get his take on the news. He told us Google has obviously seen an appetite among some number of people for Glass.

Should Google Lower the Price?

“It's not a mainstream product but the company may be able to sell a meaningful number of these headsets,” he said. “When new designs come out that may broaden the audience further.”

One way that Google could sell more units immediately is to lower the price, he said, and noted the IHS teardown estimate echoes an earlier one that claimed it wasn't very expensive to manufacture Glass.

“Google has protested that these estimates are inaccurate,” Sterling said. “However, I've got to believe there's significant margin there for the company. If they want to move more volume they can make it cheaper and that would translate into more demand and sales.”
 

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