Many people have indeed doubted Kinect’s initial launch price of £130, sighting that the core components – such as the cameras and depth sensor – barely featured costs that rose up into double digit figures. Now, that almost certainly appears to be the case according to an independent report by UBM TechInsights.
After performing a teardown on the hardware, the value of the indivudual components is said to total around $56 (£34), without taking into account production costs in order to make the unit. A bill of materials also lists parts made by PrimeSense Ltd., Marvell Technology Group Ltd., Texas Instruments Inc. and STMicroelectronics NV, as making up the technology found inside the device. Out of the BOS, the PrimeSense reference system (documented below) makes up just $17 of the total component cost, with the other 20 parts taking up the rest.
According to the teardown featured at UBM TechInsights, the core tech of Kinect is made up of four microphones which track the users position via the use of auditory feedback, while the PrimeSense reference system consists of one non-LED camera and two image sensors, which detect motion. The first is an RGB camera sporting 32bit colour and VGA (640x480) resolution, whilst the second uses a monochrome-based solution with 16-bit QVGA resolution.
Back to the $56 component costs - And while the decision to sell Kinect at what looks like a profit-mongering £130, considerations have to be made against additional production costs, along with the high levels of R&D invested into software and development of the actual tech. All of these are likely to eat into any profit which Microsoft could have been making on the device.
It is likely that overall margins are pretty small, although we won’t know until the production cost per unit is revealed – a prototype design apparently cost around $30,000, so that’s one chunk of the R&D budget right there.