As techies turn against Google Glass, Google might have underestimated the cost of its innovation.
Three months ago — on April 15 — Google (GOOG) finally made its augmented reality glasses available to any one who wanted a pair. No more having to plead your case to convince the company that you were influential enough to be worthy of joining the Explorer program. However, the Google Glass price remained at its lofty $1500 level. So while the artificial purchase constraint hoops were removed and anyone could buy Google Glass (at least for a day), in reality the exclusivity of the AR glasses remained.
And that’s a problem.
If you are going to release a potentially revolutionary new product, it makes sense to build hype. Done correctly, that hype turns into demand. And after the big public Google Glass demo at Google I/O 2012, buzz was building. Google had managed to shrink the AR glasses prototype from an eight-pound piece of headgear to a discrete device that could almost pass as a pair of ordinary glasses. Everyone wanted to be like GOOG’s Sergey Brin.
In March 2013, Google’s Explorer program offered select individuals the privilege of paying $1500 to become a Google Glass Explorer. But only after they submitted applications through Google+ and Twitter (TWTR).
The Google Glass club remained very exclusive through 2013. And while the videos, blog posts and social media updates by Google Glass Explorers did help to raise awareness of the high tech product, there was a downside. By keeping the AR glasses in limited supply — essentially for those deemed to be “influencers” only — and keeping the Google Glass price at $1500, GOOG created a negative reaction from the general public that launched a new term: “Glassholes.”
As part of the backlash against Google Glass, people wearing the AR glasses were banned from various bars and businesses.
Given the cost of manufacturing the AR glasses, it seemed like GOOG had plenty of room to move on its Google Glass price. According to the Wall Street Journal’s Erin McCarthy and Ben Fox Rubin, the Google Glass cost including manufacturing and parts is just $152
But on April 15, the day we finally saw Google Glass for sale to the general public, the price tag remained at $1500.
Predictably, Google Glass sold out on that one day. After all, there are still plenty of people in the U.S. who can fork over the $1500 Google Glass price without even thinking about it. Then there were additional sale days, and now we’re at the point where anyone can sign up for the Explorer program — so long as they’re willing to shell out that $1500.
The longer GOOG keeps this up, the more they polarize the public and the bigger the PR mess they’ll have on their hands if they ever do cut the Google Glass price. All those Explorers who shelled out $1500 aren’t going to be happy if a retail version of the product ends up costing half as much.
In the meantime, the number of Google Glass Explorers may have doubled or tripled, but the AR glasses are still far from widespread and the “Glasshole” stigma remains. Three months after that first public Google Glass release date, little seems to have changed. And the public demand for the AR glasses that GOOG was hoping to generate seems to have been replaced by a dismissal of the technology as toys for people with too much money.
If Google has created demand for AR glasses, though, it could turn out that the prolonged Explorer program has served to primed the pump for competitors to swoop in. Samsung (SSNLF) is suspected to be working on AR glasses that closely resemble Google Glass specs. The so-called “Gear Glass” is rumored to be on track for a possible fall release. And Babak Parviz, the former head of Google Glass development just announced his move to Amazon (AMZN) — a “Kindle Glass” may be in the works.
You can bet that if Samsung, Amazon or any other tech company releases its own AR glasses, they will seriously undercut that $1500 Google Glass price. And in doing so, they could well leverage all the marketing work GOOG has undertaken on Google Glass. They could take any hype that AR glasses have generated — and the backlash against Google as a company catering to the rich and connected — turn that against GOOG and make their own AR glasses into a smash hit.
Maybe exclusivity wasn’t a great idea after all.
As of this writing, Robert Martin did not hold a position in any of the aforementioned securities.
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