Cost of production plays a major part in the success of the product due to its relation to the overall profit. “The costs related to making or acquiring goods and services that directly generates revenue for a firm. It comprises of direct costs and indirect costs. Direct cost are those that are traceable to the creation of a product and include costs for materials and labor whereas indirect costs refer to those costs that cannot be traced to the product such as overhead.” When we look at Google Glass and break the price down piece by piece. The cost of  $1,500 might seem excessive to many consumers but there are a lot of costs that come with this innovative product. If we look at the direct cost for this product we have the bill of materials cost and also the manufacturing cost. “Google Glass carries a BOM of $132.47. When the $20.00 manufacturing expense is added, the cost to produce the head-mounted computer rises to $152.47.” This would appear to be a 90% profit just based on the direct cost, but we need to take a look at the indirect cost also. The indirect cost would be comprised of engineering, software and platform development among other factors. If lowering the cost will be needed eventually due to competition we need to decrease the indirect cost, due to the direct cost not being a huge factor in the overall product cost. 
The Nexus 6 is still a very new product and the cost of production numbers are not available at this time. We can still take a look at other information to get an idea of the cost to produce this phone. With the price of the Nexus increasing this year it's a great time to analyze this information. The best estimate we can get for direct cost would be to look at a similar products of Google which would be the Google Nexus 7. There are some differences going from a tablet to a phone, notably the ability to receive and make calls. The screen and the components would still be very similar giving they function very similar to complete the same tasks. “Based on preliminary analysis, IHS found that the 8GB Nexus 7 carries a bill of materials (BOM) of $151.75. Add in manufacturing costs and that increases to $159.75. The 16GB model, meanwhile, has a BOM of $159.25 and $166.75 with manufacturing costs.” Now that we can get an estimate that the direct cost would be around 163 dollars depending on the model we can take a look at the indirect cost. The MSRP for the Nexus 5 was $350.00 so we can conclude reasonably total cost minus the direct cost of around $163 would equal $187.00.  With this information we can understands the indirect cost would be between one dollar and $187.00, but there needs to be room for profit so indirect cost should be as minimal as possible. 
