IHS says the $1500 Google Glass' hardware and manufacturing costs are just US$152.47, but value is added by other factors outside of the Bill of Materials.
IHS dissected a Google Glass device, finding its Bill of Materials is US$132.47. Adding a US$20 manufacturing cost gives the total figure of US$152.47.
However, IHS senior director of cost benchmarking services, Andrew Rassweiler, says the BOM cost represents only a portion of the actual value of the system.
"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," said Rassweiler.
According to Rassweiler, the Google Glass used by the thousands of early adopters "feels 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."
One example is the apps processor: Google Glass uses the Texas Instruments OMAP4430, which is made with 45nm semiconductor manufacturing technology, and is 2 generations behind the 28nm chips used by current flagship smartphones.
An expensive component is the liquid-crystal on silicon (LCOS) projector display which provides a near-eye viewing experience. Made by Taiwan-based Himax Technologies, this component costs US$20 each.
Besides the apps process, TI also supplied the power management IC, audio codec, battery fuel gauge and regulator ICs. In all, it accounts for 29 percent of the Google Glass BOM.
In terms of sensors, Glass includes two accelerometers: one from STMicroelectronics and another from InvenSense.
The single most expensive component of Google Glass is the US$22 titanium frame, a rare choice for commercial electronic devices, but one which is not out of place for an exclusive and premium product from Google.