Google Glass glasses may look goofy. They open up a can of privacy concern worms. And the $1,500 price tag is enough to make even most early adopters wince. However, Google's (GOOG) first major foray into wearable computing can't be considered a failure just yet.
But what if Google were exposed for being a greedy gouger? What if a Google Glass isn't worth anything close to the price that the world's leading search engine and online advertising platform provider is charging?
Google easily sold out of its Google Glass inventory in a single day in April, but the shocking truth about the cost of its components may make the next sale a little trickier.
Tearing Down Glass Houses
TechInsights recently completed a teardown of Google Glass, in which a product is disassembled, and each component is assessed a value. Teardowns are popular with tech buffs just to see what's inside the guts of consumer electronics. TechInsights estimates that all of the parts making up Google Glass -- including the eventual assembly and test procedures -- set Google back a mere $79.78. A spokesman for Google called the estimate "absolutely wrong" and declined further comment.
No one was expecting Big G to be selling Google Glass at a loss. That's just bad business. Companies need to operate profitably, and research and development costs should be recouped.
Outside of video game consoles and some of Amazon.com's (AMZN) Kindle products, most products hit the market at markups. And the only reason why gaming console makers and Amazon have sold products at or below costs in the past is because they expect to make that back -- and then some -- in the future through their vibrant ecosystems. Video game system makers get paid by software developers for every game that's eventually sold, and Amazon hopes Kindle buyers spend enough money buying digital books, music, videos, and games to make the gamble pay off over time.
Google wants folks online to consume its growing array of ads, but that's not enough to take a big hit on hardware.
Google Glass Isn't Just for Rich Nerds
Don't let the backlash against Google Glass owners -- or even the tone of this article -- blur the benefits of the specs, which can project computing images so only the wearer can see them. It's not just for rich nerds. For every tech blogger getting dirty looks upon entering a theater or walking down the street for fears that the five-megapixel camera is rolling, plenty of people are putting Google Glass to extraordinary uses.
Early responders are using Google Glass to beam images to nearby hospitals so they can get up to speed on the injuries of arriving patients. Fitness junkies are using Google Glass to navigate running and cycling paths without missing a beat. Google Glass apps add gaming elements to workouts, encouraging more active lifestyles. A surgeon is using it to call up a patient's X-ray during a procedure so there's no need to look away from the operating table. The New York Police Department and U.S. Air Force are testing them to see if they enhance their operations.
%VIRTUAL-article-sponsoredlinks%All of these benefits will make Google Glass a big winner down the line, but it will have to come at a lower price. For now, it may not matter. On April 15, it sold out of one of one of the five frames available within hours, and by the end of the day all of the Google Glass Explorer slots were filled up. The one-day sale was the first time that Google made the specs available since offering select developers and tastemakers the glasses as beta testers a year ago.
The reviews have been mixed, but it's a safe bet that published perspectives will improve -- and wider adoption will continue -- once Google does the right thing and prices them at a more reasonable markup to its actual cost.
Big markups are Apple's (AAPL) thing, and Google is trying hard to set itself out as the platform for the masses. Google got in early on the wearable computing revolution, but it can't let greed lead to it falling behind.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple and Google (C shares).
10 Easy Ways to Pay Off Debt
Is Google Glass Worth $1,500 - or $79.78?
"Your daily habits and routines are the reason you got into this mess," writes Trent Hamm, founder of TheSimpleDollar.com. "Spend some time thinking about how you spend money each day, each week and each month." Do you really need your daily latte? Can you bring your lunch to work instead of buying it four times a week? Ask yourself: What can I change without sacrificing my lifestyle too much?
Remove all credit cards from your wallet and leave them at home when you go shopping, advises WiseBread contributor Sabah Karimi. “Even if you earn cash back or other rewards with credit card purchases, stop spending with your credit cards until you have your finances under control,” she writes.
If you do a lot of online shopping at one retailer, you may have stored your credit card information on the site to make the checkout process easier. But that also makes it easier to charge items you don't need. So clear that information. "If you’re paying for a recurring service, use a debit card issued from a major credit card service linked to your checking account," Hamm writes.
Reward yourself when you reach debt payoff goals. "The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated," Bakke writes. Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend camping trip. "If you aim to reduce your credit card debt from $10,000 to $5,000 in two months," Bakke writes, "give yourself more than a pat on the back."
“Establish a budget,” writes Money Crashers contributor David Bakke. “If you don't scale back your spending, you'll dig yourself into a deeper hole." You can use personal finance tools like Mint.com, or make your own Excel spreadsheet that includes your monthly income and expenses. Then scrutinize those budget categories to see where you can cut costs.
Sort your credit card interest rates from highest to lowest, then tackle the card with the highest rate first. "By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards," writes Mint.com spokeswoman Hitha Prabhakar.
To make a dent in your debt, you need to pay more than the minimum balance on your credit card statements each month. "Paying the minimum -– usually 2 to 3 percent of the outstanding balance -– only prolongs a debt payoff strategy," Prabhakar writes. "Strengthen your commitment to pay everything off by making weekly, instead of monthly, payments." Or if your minimum payment is $100, try doubling it and paying off $200 or more.
If you have a high-interest card with a balance that you’re confident you can pay off in a few months, Hamm recommends moving the debt to a card that offers a zero-interest balance transfer. "You’ll need to pay off the debt before the balance transfer expires, or else you’re often hit with a much higher interest rate," he warns. "If you do it carefully, you can save hundreds on interest this way."
Have any birthday gifts or old wedding presents collecting dust in your closet? Look for items you can sell on eBay or Craigslist. "Do some research to make sure you list these items at a fair and reasonable price," Karimi writes. “Take quality photos, and write an attention-grabbing headline and description to sell the item as quickly as possible." Any profits from sales should go toward your debt.
If you receive a job bonus around the holidays or during the year, allocate that money toward your debt payoff plan. "Avoid the temptation to spend that bonus on a vacation or other luxury purchase," Karimi writes. It’s more important to fix your financial situation than own the latest designer bag.