Kinect's Estimated Hardware Worth: $56 USD

By Perpalicious, 6 years ago
With the release of Kinect, a lot of gadget buffs felt a surge of positive emotions. iFixIt deconstructed the little gadget and found out that it's extremely sophisticated. A few companies thought Kinect was such a great piece of technology that they posted a reward for an open source driver. But, what if I told you Kinect, despite its sought after elegance, is only worth $56 USD, almost $100 USD cheaper than the retail price?

UBM TechInsights -- a corporation that helps companies leverage and protect IP assets -- says that Kinect carries a bill-of-materials (BOM) equal to $56 USD after they took it apart and examined the components.

PrimeSense, whose technology is what makes Kinect so innovative, has $17 USD worth of their technology within the Xbox motion device. From that $17, the Kinect gets its cameras, microphones, and processor.

Microsoft expects to sell 5 million Kinect units by Christmas. For those who hate mathematics, 5 million units is close to $750 million USD. From TechInsights numbers, we can deduce each Kinect makes Microsoft $93.99. As a result, Microsoft will make approximately $479 million USD. According to TechInsights, Microsoft stands to make a hefty profit. Remember, though, that these numbers do not include cost of production, production overhead, marketing, and so forth.

The "big" numbers don't only positively affect Microsoft: component suppliers for Kinect will be receiving a nice boost in sales, especially PrimeSense.

The interesting thing, regardless of the jaw-dropping numbers, is that TechInsights found a stand alone processor. This "processor" was apparently removed according to Kinect's creative boss Kudo Tsunoda, who said to CVG that "there's just no need to have that extra processor."

What do you think this means? Is this a way to ensure that Kinect has room to grow in the future and drive home that experience is important? In the end, Microsoft seems to have a solid future game plan, especially since they are making a pretty penny with Kinect, their new technological powerhouse.