There is a Reason Glass Cost a lot More Than the Manufacture Price - Stop freaking out internet...

[Coconut Money Affiliates]

Original Post

 

"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," Andrew Rassweiler, senior director of cost benchmarking services for IHS, said in a statement. "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 (NRE) 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."

 

So basically, they're is saying that it is worth far more than the $152.47 that it cost to produce. People just need to quit freaking out about this...

[MangoJuiceStain]

http://www.cnet.com/news/google-glass-cheap-to-make-but-more-than-sum-of-its-parts-report/?tag=nl.e703&s_cid=e703&ttag=e703&ftag=CAD090e536

 

(editing post at the moment)

Why didn't you edit it before you posted it?

[dev893]

this surprises you why?

[ciprian97pop]

Why didn't you edit it before you posted it?

because he probably wanted to be the first to post this....

[dyent10]

Why didn't you edit it before you posted it?

 

maybe he was more worried of being the first one to post it rather than actually posting something more meaningful.

[Coconut Money Affiliates]

Why didn't you edit it before you posted it?

because he probably wanted to be the first to post this....

maybe he was more worried of being the first one to post it rather than actually posting something more meaningful.

Being first is a bonus, but I just wanted everyone to see this as fast as possible. 

[Zeke]

"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."

 

Oh gee, we've never seen great packaging before. Anyone remembers the wooden crate from Nvidia? (590? 690? I can't remember what was in there)

[Scheer]

It astonishes me that people don't understand how or why products cost more than their BOM.

[GlassBomb]

Before I actually bother reading through the article.

 

So many people forget about the research that is needed for new products. You can't simply take existing products and cram them into a different form factor. They need to figure out production, what new parts they need for what, and how to deal with all the logistics for the new item.

 

People get mad when they see a first generation (and/or limited run) products costing silly amounts of money. When the actual raw cost of the product is a fraction of the cost.

[xjohnny3589]

"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."

 

Oh gee, we've never seen great packaging before. Anyone remembers the wooden crate from Nvidia? (590? 690? I can't remember what was in there)

690

[Sidiox]

Well duh. Every product they do the BOM for is just the parts you should always realise that R&D and marketing also costs money.....

[MrYuriy]

That is exactly why I never cared much for Teardowns. All they are doing is pricing out the parts as they see it. As the article stated, which to me was quite obvious anyways, the teardown doesn't take into account many, many other expenses such as the software itself and the programming that went into it, royalties that must be paid to other companies, licensing fees, production costs, packaging, etc. These are all non-hardware expenses that usually raise the price just as much, if not more, than the hardware itself. This isn't even taking into account the money that was spent to PAY the developers to create the device - program, design, research, test, market, advertise, etc..

 

Now, I know, I know, the Teardown is just for the hardware aspect of items & components; but if the whole point of a teardown is to give consumers a price to distinguish the the difference of price of hardware from the profit that a particular item has - this is subjective considering the other aspects that aren't taken into account and priced. And that's because in most cases, this would be impossible unless that particular company/manufacturer released every detail and dollar that awent into the item; which would be stubbing their own toes.

[xjohnny3589]

everything costs more than it's manufacture price, why are you so mad?

[Coconut Money Affiliates]

everything costs more than it's manufacture price, why are you so mad?

Im not, the internet is because Google charged $1350 more. 

[RH00D]

The funniest part about this is that when Apple's iPad cost 2x it's BOM people were jumping up and down about how overpriced the iPad was.

 

But when its a company you prefer that does it, its justifiable in your mind. Fanboyism at its finest.

 

Disclaimer, I don't take either side on this subject and am not a fan of either Google nor Apple so what they do doesn't even matter to me.

[Fetzie]

Something costs more than the BOM? Fine. They have to pay people to work on it, make it, ship it and market it. But when it costs ten times its BoM, you start to feel they are having you on.

[LAwLz]

It costs a lot because it's a completely new product and it's not mass produced yet.

In a few generations and with mass production (read: like phones) you can afford to sell stuff at near BOM and still make money. You can't do that with a brand new product still in development and currently aimed at a really tiny consumer base.

I didn't really see anyone freak out over the BOM of glass though. Pretty much every post I read about it said that it was to be expected with this product. People really need to stop trying to justify phone manufacturers' ridiculous prices, like charging 200 dollars for something that costs literally 20 dollars to include (with absolutely no additional fees involved).

[qwertywarrior]

people freaked out ? lol ...

1500$ is very understandable

[Dylan522p]

you mean they had R&D costs... NO WAY!

[Misanthrope]

Yeah not really. I mean I'm sure every word of that is true but costs for such a fucking giant like Google means nothing: they could basically afford to loose a lot of money and sell it well below cost.

 

No they just really want to create artificial scarcity and a feel of exclusivity by making it so expensive. It's people nature to assume that because it's so rare and expensive it's more exclusive and well designed. This is marketed as a fashion accessory and Google is taking a page straight out of the Apple tactics books only taking it a step further by doing this type of "testing" which is as much testing as it is a marketing campaign.

[LAwLz]

Yeah not really. I mean I'm sure every word of that is true but costs for such a fucking giant like Google means nothing: they could basically afford to loose a lot of money and sell it well below cost.

 

No they just really want to create artificial scarcity and a feel of exclusivity by making it so expensive. It's people nature to assume that because it's so rare and expensive it's more exclusive and well designed. This is marketed as a fashion accessory and Google is taking a page straight out of the Apple tactics books only taking it a step further by doing this type of "testing" which is as much testing as it is a marketing campaign.

Google also artificially limits people from getting it with the high price.

Glass is not ready for prime time so it's probably best if the general public run out and buy it just to realize it's pretty crappy.

[ItsComrade]

"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."

 

Oh gee, we've never seen great packaging before. Anyone remembers the wooden crate from Nvidia? (590? 690? I can't remember what was in there)

 

Yeah, really. I'm starting to worry that this and other tech products will go from revolutionary and for people who appreciate tech to being a status symbol like the iPhone or Hollister clothes. Please google, don't do it.

[Woolbeach]

It's only real life, why you haff' to be mad?  :huh: