Hololens price estimate

Motor_Mouth

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If you are the only entrant in the market, then your share will be 100% whether you sell ten or ten million devices. So until Microsoft has competition in that market, from Magic Leap or whoever, they can price it however they like and still be assured of 100% market share. It would be a pretty stupid businessman who would lose money for that 100% market share when he could put a hefty premium on it and still have a 100% share. To put it another way, it is better to make some money from a few sales than no money at all from lots of sales.

You can also look at how prices fall over time in the console market. When PS3 launched in Australia, it was Au$999 but over time Sony steadily lowered it, until it was just Au$299 by the time PS4 was released. I think Microsoft will adopt a similar strategy here - initially it will be priced high but if/when some competition arrives, or perhaps when they are 100% confident that the platform is perfect, or maybe when production ramps up and economies of scale kick in, they will drop the price to increase sales. Whatever, I am certain that if you want a HoloLens on Day 1, you are going to have to be prepared to pay a lot for it. My expectation is somewhere between US$1000 and US$1500 but I am prepared to pay twice that if I have to.
 

DanielJoseph7

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If you are the only entrant in the market, then your share will be 100% whether you sell ten or ten million devices. So until Microsoft has competition in that market, from Magic Leap or whoever, they can price it however they like and still be assured of 100% market share. It would be a pretty stupid businessman who would lose money for that 100% market share when he could put a hefty premium on it and still have a 100% share. To put it another way, it is better to make some money from a few sales than no money at all from lots of sales.

You can also look at how prices fall over time in the console market. When PS3 launched in Australia, it was Au$999 but over time Sony steadily lowered it, until it was just Au$299 by the time PS4 was released. I think Microsoft will adopt a similar strategy here - initially it will be priced high but if/when some competition arrives, or perhaps when they are 100% confident that the platform is perfect, or maybe when production ramps up and economies of scale kick in, they will drop the price to increase sales. Whatever, I am certain that if you want a HoloLens on Day 1, you are going to have to be prepared to pay a lot for it. My expectation is somewhere between US$1000 and US$1500 but I am prepared to pay twice that if I have to.
Ya, but think about how much they want this to get out there and be known. So I am prepared to pay over 1000$, but it's not crazy to think that it will be around 800$.
 

Motor_Mouth

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$800 is certainly possible but most here seem to want it to be $500 or less and that simply isn't going to happen. But the one thing Microsoft won't want to do is get millions of them out there, only to discover there is some serious problem with it that didn't show up in their closed testing of the device and system. Apple can get away with doing that (antenna-gate, bend-gate, recent new versions of iOS) but Microsoft would be crucified in the press for something far less serious, completely killing any hope HoloLens has of being successful. Unlike Windows 10, they can't get lots of people to beta-test it without far too many details leaking ahead of the official launch.

The best way to get the ball rolling is to start with a bunch of keen early adopters who are willing to pay whatever it costs, who will help find and kill any little problems, then get it out to the wider market. And in recent times we have seen Microsoft's reluctance to go into full production with a new product (after the massive write-down with the original Surface) so I really can't see them going in too hard here.
 

chuckdaly

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The lowest price I predict is $999. Its a computer with built-in head tracking and display. Why would anyone think this is less expensive to build than a macbook is beyond me. If I were an interior designer or architect, I would pay $4000 to buy one for my business.
 

DanielJoseph7

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The lowest price I predict is $999. Its a computer with built-in head tracking and display. Why would anyone think this is less expensive to build than a macbook is beyond me. If I were an interior designer or architect, I would pay $4000 to buy one for my business.

Well one of the components is a Kinect sensor I believe, and it costs Microsoft 79$ to make a Kinect 2.0 as a whole. So with all the other parts and such, I would guess it would cost them just under 500$ to make? So I'm thinking $800-$1500, but we'll find out soon.
 

Motor_Mouth

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It is incredibly na?ve to think that the price of anything you buy is a reflection of the cost of manufacturing it. e.g. Do you really think it costs $100 to put an extra 32Gb of storage into a phone or tablet? Of course it doesn't, it probably costs $2, but it is a good excuse to charge the customer an extra $100 so that's what they do. Every company will set the absolute highest price they think they can get away with.

With HoloLens, there is no existing market so they don't have to worry too much about what everyone else is charging. So the only real consideration for them is going to be how many they want to sell. You seem to think they want to sell 100million in the first week but I can't see that, for two reasons I've already explained - they'll want to validate the platform and they won't want to manufacture too many in case it tanks. They'll also look at the iPhone and see that Apple only sold around 3 million of the first gen model, over a period of more than a year, but 8 years later they sold 40 million in just one quarter. That will give them confidence that if they start slowly and get everything absolutely right, success will come in time.

The other lesson they will look to is the $800million Surface RT write-down they incurred when they over-estimated demand. As we've seen since that incident, Microsoft are happy to allow demand to outstrip supply - we've seen stock outages of Surface on a regular basis and also for Band. But they will want to tread a fine line with HoloLens - they won't want too many inpatient customers but they still won't want to manufacture too many devices. The best way to make this work is to price it high enough that you can meet demand without the risk of overstocking your warehouses.

Of course, Microsoft have also used staggered global availability to restrict supply - you still can't buy Band in Australia, even though Sydney is getting the first Microsoft Store built outside the US. Obviously I'm hopeful it will get a global release but if they do restrict it to the US, that could work in favour of a lower price, although even then I'd expect it to be much closer to $1000 than $500.

Lastly, I'd point out that Kinect only has three sensors, HoloLens has seven, meaning you can comfortably double the cost of Kinect and add a bit more when looking at the cost of making HoloLens. It also has all the components of a Surface 3 plus a custom HPU and where the S3 uses mass-produced screens, HoloLens uses brand new technology to project it's holograms. Brand new technology does not come cheap, so you can expect the HPU and projection hardware to cost more than the rest of it put together. So if you take the cost of a Surface 3, say $250 (very conservative), add two Kinects and then double it, I'd say that is likely the absolutely minimum cost of manufacture. What does that total, then? $820. Add in wholesale and retail margins and $1200 starts to seem like the cheapest they can sell it without losing money.
 

Spencer Carriveau

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The lowest price I predict is $999. Its a computer with built-in head tracking and display. Why would anyone think this is less expensive to build than a macbook is beyond me. If I were an interior designer or architect, I would pay $4000 to buy one for my business.
Macbooks are cheap to build, however you end up paying like 300% the actual cost just for the little apple logo on the device.
 

DanielJoseph7

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Well motor_mouth, I don't really think that they want to sell millions in the first week, as much as I think they want to have an appealing price. And I agree with that last part, because manufacturing costs do relate to the sale price. As in the more it costs to make, the higher the sale price, generally. And $1200 is nothing crazy for the HoloLens, that's still cheap, so I'd take that! As long as it's under $2000 I'll get it straight away.
 

chuckdaly

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I agree that macbooks are relatively cheap to manufacture. Yet, good luck finding a Macbook review, where the reviewer even implies that it could be overpriced. My guess is the hololens will cost more to produce, but be priced similar ($1500-2000 MSRP). If it works as its advertised, it will be worth every penny.
 

Motor_Mouth

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Here is an interesting estimate from PC World - "Press-room guesses on its price all start at four figures, with Gartner analyst Martin Reynolds believing that they’ll be priced at $2,000 initially. (Eventually, I believe, it will be about the price of an Xbox One, or $300 or so, but that’s a couple of years away.) " That's kind of in the same ball park I am expecting.
 

Elwood Jones

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I think between $600 and $800. About the same as a high end phone. Price it too high and it will be a flop because you price the average young person and a lot of us ol' dudes out of the market. I won't buy an $800 phone so why would I spend that kinda money on a gaming device?
 

DanielJoseph7

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I think between $600 and $800. About the same as a high end phone. Price it too high and it will be a flop because you price the average young person and a lot of us ol' dudes out of the market. I won't buy an $800 phone so why would I spend that kinda money on a gaming device?
This is not a gaming device. It's multi-purpose. But I see where you're going.
 

Motor_Mouth

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I think between $600 and $800. About the same as a high end phone. Price it too high and it will be a flop because you price the average young person and a lot of us ol' dudes out of the market. I won't buy an $800 phone so why would I spend that kinda money on a gaming device?
Again, you are assuming Microsoft want to get it into everybody's hands from the get-go but history tells us that is NOT what they will do. That said, there seems to be no shortage of morons willing to hand over more than a grand for an iPhone 6+ so I can't see high price necessarily being too much of a barrier for those who really want to get in on this.

I wouldn't pay $800 for a phone but this is a very different situation. Firstly, I don't have to spend $800 to get a phone that works for me, whereas if I want a Holographic Windows 10 computer, HoloLens will be the only game in town. I'll have to pay whatever they ask or miss out. Secondly, it is a fully fledged Windows 10 PC and I paid way more than $800 for all but one of my Windows PCs (8" tablet). Finally, look at the X-Box market - they only sell about 4million per quarter, compared to around 10million Lumia phones. Yet everyone considers X-Box to be a very solid business and Lumia phones to be a waste of Microsoft's time. This shows that it's all relative and you can make a solid business without having to get one into every home.

HoloLens doesn't have to be the next big thing to be successful, it just has to find a niche and own a good chunk of it, like X-Box does. It also has significant value to Microsoft as the flag-bearer for Windows 10, showing, in the best possible way, just how far ahead of the competition W10 is.
 

grahamf

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I'm thinking a minimum of $800, but to be honest I don't know what to expect. To me this is still bordering on science fiction.
 

Daniel Ratcliffe

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I think for something like this we're looking at a six figure digit price. It will not be cheap. Windows Phone doesn't hold up as an example as despite them making their phones really affordable they're still getting annihilated. I don't think price is the problem here, I think it's the perception of Microsoft. That being said, I know whatever they release it at, I won't be able to afford it. So will have to wait for v2-3.
 

DanielJoseph7

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I think for something like this we're looking at a six figure digit price. It will not be cheap. Windows Phone doesn't hold up as an example as despite them making their phones really affordable they're still getting annihilated. I don't think price is the problem here, I think it's the perception of Microsoft. That being said, I know whatever they release it at, I won't be able to afford it. So will have to wait for v2-3.

Hold up, 6 figures? You think $100,000 will be the price?!
 

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