Liz Gannes

Recent Posts by Liz Gannes

Google Glass Could Be $3-Billion-a-Year Business, Says Analyst

Google Glass should be worth $3.27 billion to Google in 2017, says one financial analyst who has been wearing the device and showing it to investors.

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http://www.catwig.com/google-glass-teardown/

Even with zero profit margin, Google should be able to make money from Glass via additional searches, better targeting from increased data collection and revenue share from app sales.

By 2017, Google Glass should have an installed base of 64,500, and new units should sell for $349, estimated Robert S. Peck of SunTrust Robinson Humphrey, in a research note.

And the face-mounted computer display should bring in $3.27 billion in non-hardware revenue that year, or 3.7 percent of an estimated $86.4 billion 2017 total revenue, Peck said.

That will be primarily from search ads on Glass that fulfill prompts like “Okay, Glass: Google ‘pizza nearby.’” Peck said his calculations included estimates that Glass users should search twice more per day than their current activity, and Glass ads should be more effective and more expensive.

Much of that actually sounds rather modest — unless Glass is a total and utter failure — given that some 10,000 testers have already paid $1,500 per device. (Whether they continue to wear it every day is a different story.)

Though Glass may seem wacky and dopey now, Peck thinks it’s transformative. “If there is one point investors should take away from Glass, it is that the technology is unique because it enables a person to perform actions while keeping their head up and continuing their first-person perspective,” he wrote.

The New York Times reported in February that Google hopes Glass will account for three percent of revenue by 2015.

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