Oculus Rift teardown shows bill of materials and manufacturing just slightly over 200$

[Derangel]

22 hours ago, Carclis said:

I'm not sure about anybody else here but $600 sounds like a great deal when you consider that products like the Samsung Galaxy S7 retail for $700 and are obsolete after a year. There's no way those phones have higher R&D costs than VR headsets.

I would't be surprised if it wasn't too far off. It really depends on how long some parts of it where being worked on. Samsung manufactures a lot of the components of their phones meaning there is a R&D cost associated with every part. R&D on those screens cannot be cheap.

[Carclis]

1 hour ago, Derangel said:

I would't be surprised if it wasn't too far off. It really depends on how long some parts of it where being worked on. Samsung manufactures a lot of the components of their phones meaning there is a R&D cost associated with every part. R&D on those screens cannot be cheap.

That's true, but the Occulus Rift uses two screens which function in a vastly different way at about the same resolution and form factor and that's ignoring the sensors and software. Also keep in mind that pricing cannot be as aggressive as the likely market for such a product is much smaller than what the Samsung phone would have.

[Derangel]

5 hours ago, Carclis said:

That's true, but the Occulus Rift uses two screens which function in a vastly different way at about the same resolution and form factor and that's ignoring the sensors and software. Also keep in mind that pricing cannot be as aggressive as the likely market for such a product is much smaller than what the Samsung phone would have.

Very true. Samsung also uses a lot of their stuff in multiple products and sells them to other companies, giving them multiple avenues to make up development costs and profit from.

[abhigyan001]

On 7/30/2016 at 8:26 PM, dizmo said:

Errmm...right. I don't think you quite get how hardware is designed.

To be fair it's extremely unlikely they have their own factories to manufacture it.

But the rest is spot on.

Even if they did not have their own factories. They had to pay someone else right? It's basically the same thing just more expensive.

[dizmo]

5 hours ago, abhigyan001 said:

Even if they did not have their own factories. They had to pay someone else right? It's basically the same thing just more expensive.

Paying someone is cheaper.

[rashdanml]

This isn't a surprise. MSRP is set at a price point where both the manufacturer and the retailer can make a decent amount of profit (to stay in business and fund future iterations of the product). Of the $600, retailer probably takes $150-200, while the manufacturer takes the rest, less cost of parts and assembly. 

[Derangel]

1 hour ago, rashdanml said:

This isn't a surprise. MSRP is set at a price point where both the manufacturer and the retailer can make a decent amount of profit (to stay in business and fund future iterations of the product). Of the $600, retailer probably takes $150-200, while the manufacturer takes the rest, less cost of parts and assembly. 

Much less than that most likely. Retail profit margin on most consumer electronics is pretty bad.

[abhigyan001]

On 8/7/2016 at 4:21 AM, dizmo said:

Paying someone is cheaper.

If you already have a production line set up. It's not.

 

Otherwise it is.

[Sakkura]

16 hours ago, rashdanml said:

This isn't a surprise. MSRP is set at a price point where both the manufacturer and the retailer can make a decent amount of profit (to stay in business and fund future iterations of the product). Of the $600, retailer probably takes $150-200, while the manufacturer takes the rest, less cost of parts and assembly. 

Many of the units are not sold through a retailer.

 

And they are making less profit on it than that, most likely, as the bill of materials is certainly higher than the deeply flawed estimate in this report. I don't want to sound like a broken record, but these idiots even forgot to include the price of the lenses in the headset. And that's one of the most expensive components... plus they think it's for consoles.

[jaggysnake57]

how is this shit show still open 

 

 

can i get a lock please

[LAwLz]

I called this a long time ago (although I said 300 dollars, to be in the safe side). 

I laughed when people said it was selling at BOM at 600 dollars. Anyone with half a brain and knowledge about the cost of components knows that that's bullshit. 

 

It is slightly lower than I expected by about 50 dollars though. 

 

It's a shame that Oculus sold to Facebook. Their goals went from wanting to make VR as popular as possible (as in, good and cheap), to making the maximum amount of money they could (which means selling it for the ridiculous price of 600 dollars). 

[bcp]

Is it just me, or is there no tab for the Fresnel Lenses on that bill? I was under the impression that these were quite an expensive component to manufacture.

[LAwLz]

1 hour ago, bcp said:

Is it just me, or is there no tab for the Fresnel Lenses on that bill? I was under the impression that these were quite an expensive component to manufacture.

Lens manufacturing like this (not grinded to fit a specific frame, and not prescription glasses) is pretty cheap. They probably put it under mechanicals.

[jagdtigger]

1 hour ago, bcp said:

Is it just me, or is there no tab for the Fresnel Lenses on that bill? I was under the impression that these were quite an expensive component to manufacture.

I doubt they use carl zeiss lenses, most probably they using some relatively cheap mass manufactured ones...

[Sky Daddy]

33 minutes ago, jagdtigger said:

I doubt they use carl zeiss lenses, most probably they using some relatively cheap mass manufactured ones...

The lenses are entirely custom, and hard to produce. Compare them to the vive lenses.

[jagdtigger]

8 minutes ago, Sky Daddy said:

The lenses are entirely custom, and hard to produce. Compare them to the vive lenses.

Even if they custom made i doubt they are hard to produce... They want it to be a popular thing so they wont use parts that are hard to produce in mass quantities....

[ThinkWithPortals]

Well, I mean they need to make their margin somehow but charging 3x the material cost is kind of excessive. I mean, there was R&D, but they're owned by FaceBook, one of the most wealthy corporations on the face of the Earth.

[bcp]

@jagdtigger I can't find the source for it, i will keep looking. But I do remember reading that the custom Hybrid Fresnel lenses the rift uses (which are far more intricately dewsigned than the Vive's) were somewhere in the range of 1/4-1/2 the cost of the headset. So leaving them out of the calculation is a sizable omission. 

[LAwLz]

38 minutes ago, bcp said:

@jagdtigger I can't find the source for it, i will keep looking. But I do remember reading that the custom Hybrid Fresnel lenses the rift uses (which are far more intricately dewsigned than the Vive's) were somewhere in the range of 1/4-1/2 the cost of the headset. So leaving them out of the calculation is a sizable omission. 

That sounds like a widely inaccurate claim. That would mean that those tiny lenses (which are mass produced and don't need special cutting) would be about 150 dollars each.

I wouldn't be surprised if it's less than 10 dollars (which is expensive for such a small, non-custom cut* lens).

 

 

*By "custom" I mean as in, it is cut to a specific frame (like when you order glasses) or a certain prescription.

[TheKDub]

If some of you think oculus is being greedy with their pricing, don't forget they have plenty of people working there that they have to pay, and also have to pay for any buildings they might have for development and such of the rift or other devices, and also have to make money as well.

 

Perhaps take a look at apple? It's estimated that an iphone 6s costs apple around $236 to make, and they sell it for $749.

It's not new to have companies price things much higher than the material costs.

[bcp]

@LAwLz I found the quote from a Palmer Luckey interview. I was a little off base. He summed up the lenses as " optics that are more complex to manufacture than many high end DSLR lenses."  I'm not a photography expert, but I do have a mid-end DSLR camera and the lenses for it are not cheap.  Even assuming their mid-end lenses, I would guess that it is significantly more expensive than 10$. I'd hazard a guess that their value is ~75-100. 

That being said, whether they are 25-200$, I just wanted to point out that they left that calculation out of the breakdown. Since they are a fairly integral part of the device, not making mention of them seems skeptical to me. 

[jagdtigger]

Correct me if im wrong but the rift has one lens per eye right? A DSLR on the other hand have a complex maze of them...

[bcp]

After the interview someone brought up the same thing. While the complexity is a factor in DSLR lenses of which there are anywhere from 2-5 in a unit, a large portion of the cost is still the lense itself. 

[LAwLz]

1 hour ago, bcp said:

@LAwLz I found the quote from a Palmer Luckey interview. I was a little off base. He summed up the lenses as " optics that are more complex to manufacture than many high end DSLR lenses."  I'm not a photography expert, but I do have a mid-end DSLR camera and the lenses for it are not cheap.  Even assuming their mid-end lenses, I would guess that it is significantly more expensive than 10$. I'd hazard a guess that their value is ~75-100. 

That being said, whether they are 25-200$, I just wanted to point out that they left that calculation out of the breakdown. Since they are a fairly integral part of the device, not making mention of them seems skeptical to me. 

cm² vs cm² the lenses in the Oculus might be more complex to manufacture, but what you have to remember is that manufacturing difficulty scales exponentially with the size of the optics (the larger the piece of glass -> the more risk of imperfections somewhere in it). Making a lens twice as large might triple the difficulty. The lenses in the Oculus are really tiny compared to the lenses in a DSLR lens. On top of that, DSLR lenses has multiple elements inside them.

 

Take my Sigma 18-35mm F1.8 lens as an example. The front element has an area of 23.76cm². But that's just the front element, it has 16 other elements inside it.

The lenses inside the Oculus has 1 element, and it is something like 7cm² area.

On top of that, the elements inside a DSLR lens has additional coatings that I am not sure the Oculus Rift has. Even if it does, the number of elements that has coatings is significantly lower.

 

To compare the lenses inside the Oculus Rift to a DSL lens is quite frankly hilarious. It's like comparing a bicycle to a sports car.

 

 

We don't know if they left them out of the calculation. I think it is included in the misc section.

 

 

 

 

By the way, please bear in mind that people from Oculus actually hinted at a sub 300 dollar price back when their goal was not to make as much money as possible (when they just wanted VR to become popular). That means that their estimated manufacturing cost for the CV1 was below 300 dollars, as I doubt they would be selling at a loss.

That alone should be more than enough evidence to debunk this idiotic idea that the Oculus Rift costs like 500 dollars to manufacture or whatever stupid price people seem to believe it costs.

[Derangel]

34 minutes ago, LAwLz said:

By the way, please bear in mind that people from Oculus actually hinted at a sub 300 dollar price back when their goal was not to make as much money as possible (when they just wanted VR to become popular). That means that their estimated manufacturing cost for the CV1 was below 300 dollars, as I doubt they would be selling at a loss.

That alone should be more than enough evidence to debunk this idiotic idea that the Oculus Rift costs like 500 dollars to manufacture or whatever stupid price people seem to believe it costs.

Don't forget that that estimate was made before Facebook bought them and gave them the ability to get more expensive/better parts to make the CV1 out of and gave them more money to play with as far as R&D goes. Also, I never believed CV1 would be $300. It was a crazy thing for Lucky to say and it would have never happened, not unless they severally compromised on the device.