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Oculus Rift components cost less than $200 says IHS teardown

by Mark Tyson on 1 August 2016, 12:01

Tags: Facebook, Samsung (005935.KS)

Quick Link: HEXUS.net/qac457

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Back when we started to hear the first news about the consumer version of the Oculus Rift VR headset we expected retail prices to be lower than they turned out to be. In 2014 Oculus CEO Brendan Iribe suggested that his firm, thanks to the resources and wealth of new owners Facebook, would likely sell the HMD at "the lowest cost possible", aiming for mass market penetration.

Even on the first day of pre-orders Oculus didn't reveal the price of the Rift until the last minute. For our pre-availability report we had been tipped about a price 'upwards of US$300'. The truth was double that - $600 plus shipping. For this price you got the headset, a sensor, and an Xbox One wireless controller – necessary as Oculus has yet to release its own controllers.

A new teardown by market researchers IHS reveals that all the components in an Oculus Rift boxed retail pack, including the headset, a sensor, and an Xbox One wireless controller costs under $200 for the parts alone. In the report, published a few days ago it said the complete bill of materials (BOM) is $199.60. To this you have to add factory costs like assembly which add up to about $6.50 per shipping unit.

Of all the components in your Oculus Rift box, it is of course the headset itself which costs the most to make, nearly $140 according to the teardown. Meanwhile the cost of the Xbox One controller, to Oculus, is put at $18.00 but you have to add $6.25 for its necessary wireless adapter. Drilling down further it is the twin Samsung 1200 x 1080 pixel AMOLED displays in the HMD that are its most expensive components, the pair of them cost $69.

While it's interesting to see that Oculus sells its HMD consumer pack for about three times the cost of production, one must not ignore the price of hardware R&D, software development, and the host of other costs facing such a company.

IHS published a fully detailed costs breakdown table, with much more detail than my above cropped version, which you can look through on their website.

HEXUS Forums :: 19 Comments

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Doesn't surprise me, especially after Sony announced theirs at $399

£500 for 1400p or above please :)
Yep, no surprise that companies rip people off with new technology. And then they come with stuff like “development cost” when they got Kickstarter funded.
Yep, no surprise that companies rip people off with new technology. And then they come with stuff like “development cost” when they got Kickstarter funded.

Not to mention the facebook money. Palmer promised that the fb money would reduce the cost of the device which was a lie.
It's very important for a VR solution to work well. That means a lot of research and investment in software.

I got a free VR headset with my mobile phone. It isn't a Vive or Oculus in terms of quality, as expected for something that retails for a lot less than these solutions, but it's not terrible. It's the LG VR 360. http://www.trustedreviews.com/lg-360-vr-review

This device is clearly designed for a market where people have smaller heads than westerners. The adjustable lenses allow you to adjust from slightly crosseyed to totally crosseyed, for example. The headset arms are a bit hard to squeeze on the sides of your head. The rest of the product is cheap, it doesn't fit snugly, you can just about detect the edges of the display (FoV is too small, they should aim for 120 degrees, not 80), it's slightly pixelly (and it's not that lower than the Oculus, at 920x720 non-pentile). It does seem that a resolution of at least 2048x1600 per-eye is needed for pixel-free VR.

Pro - it's light. Damn it's light.
Pro - you can use it with your favourite headphones.
Pro - it does work, most of the time. The software sometimes crashes. But there's not much out there. The supplied aquarium demo is lovely and shows what VR can do, it is responsive in head tracking, etc.

Now the review above is clearly done by a klutz, as adjusting the lenses and focus and dealing with the ‘light blocker’ (in quotes for a reason) isn't a problem in reality. But you'll probably want to glue on something to truly block the light, as it leaks in - some kind of soft-padded interface (as found on headphones for example) would have done a better job.

Now if someone could find a way to Miracast a PC game's VR output via the phone to this headset, then it could be useful, given the dearth of software on the platform.
Component cost is not the whole story, there is:
- Development cost
- assembly
- distribution
- marketing
- customer service
- all the other big costs
- investing in VR games