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Cardboard economics

cardboard

Google shipped an interesting product and pretty website for cardboard. Basically a cheap way to turn your cheap cellphone in to a AR display unit a-la Oculus Rift. Only very crappy with low resolution and high latency; good enough to prototype & play with which is great. You put a phone in it and it pretends to be a VR display.

Someone on Hacker News posited that “Somebody should do a Kickstarter to make and ship copies of this kit for $5 or $10.” So I dug in to it a little. Here’s what my rough bill of materials looks like:

  • cardboard 1.59
  • lenses 9.00
  • ring magnet 3.98
  • disk magnet 1.98
  • velcro 2.98
  • rubber band 0.01
  • nfc tag 1.50
  • postage 5.00
  • sub total 26.04
  • labor 5
  • margin 5
  • unit cost 36.04

So let’s call it $35. This is roughly half the cost of a Dive unit. And the dive unit actually ships, is made out of plastic and you don’t have to think about building it.

A laser cutter big enough to cut the cardboard is about $11k and at $5 margin per unit you’re looking at needing to ship $80k of these cardboard units to recoup the cost, which I’m assuming would be a reasonable goal. I don’t think anyone will raise $80k of cardboard kits but as ever I could be wrong.

dodocase are flying a kite to sell a unit for $20 which is clearly too cheap without massive volume, unless you can somehow turn it in to a loss leader for something else.

So, in sum, cardboard VR headset cases are kind of irrelevant. The cost isn’t the cardboard vs. plastic housing material: It looks like it’s everything else like the lens units, the postage, the risk, the labor and so on. The PR value is of course very high. There’s clearly tens/hundreds of millions of dollars of PR value out of cardboard for roughly half that in fully loaded headcount and other costs – it all depends how you account for it. The narrative that “Google did something cool” (e.g. cardboard) out of the I/O event is worth a significant sum of money and they deserve all the credit for executing on that.

3 Responses to Cardboard economics

  1. Evan June 26, 2014 at 9:45 pm #

    Except that all of your prices are retail prices. Someone with manufacturing experience will know that all of these things, even the postage, can be obtained for dramatically less even with modest volumes. Retail prices for most of the materials you listed are 50-500% higher than wholesale.

  2. Jonas G June 26, 2014 at 11:59 pm #

    You can buy one here: http://binopad.com/

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