The cost of materials to make Google Glass come to $152, according to an analysis by IHS.
The analyst firm came out with a teardown of the wearable technology that found the hardware only accounted for a tenth of Google Glass's $1500 price tag.
You are getting far, far more than just $152.47 in parts and manufacturing
However, the analysts were quick to point out that this didn't mean Google enjoyed a 90 per cent margin on each sale.
"As in any new productespecially a device that breaks new technological groundthe bill of materials (BOM) cost of Glass represent only a portion of the actual value of the system," said Andrew Rassweiler, senior director, cost benchmarking services for IHS.
He said Google Glass "dramatically" illustrates how much of the cost of an electronic device is not tied up in hardware but other things.
"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," he said.
Rassweiler said that the present version of Google Glass felt more like a prototype.
"The design employs many off-the-shelf components that could be further optimised. 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."
The teardown found that Texas Instruments was responsible for many parts of the device. It supplied the apps processor, power management IC, audio codec, battery fuel gauge and regulator ICs.
According to The Wall Street Journal, Google disputed the IHS figures as "wildly off" the mark. "Glass costs significantly more to produce," it told the newspaper.
Google Glass is expected to go on sale towards the end of the year with many predicting it will sell for a far lower price than the current $1500.
