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Best case, Google Glass for work could add $2 billion a year to Alphabet's annual revenue

  • Alphabet's X skunkworks, led by Google co-founder Sergey Brin, hasn't given up on the market for digital glasses.
  • Report from Forrester Research suggests market will be small for next decade yet could add $1 or $2 billion to Alphabet revenue by 2025.
Doctor Huang Yunchao, wearing Google Glass, performs a live surgery to remove a tumor at The Third Affiliated Hospital of Kunming Medical University.
VCG | Getty Images
Doctor Huang Yunchao, wearing Google Glass, performs a live surgery to remove a tumor at The Third Affiliated Hospital of Kunming Medical University.

Google's digital glasses, rejected by consumers three years ago as an elite, privacy-invading toy, have picked up a lunchpail and gone to work.

The research arm that produced Google Glass, known as X and led by Google co-founder Sergey Brin, has focused on a corporate version targeted at workers ranging from doctors to warehouse managers.

But to create meaningful revenue for its parent company, Google will have to find a way to get the product into a market in which its only experience is selling cloud computing and digital advertising.

Google in the past has sold the unit for a price of $1,500, while a report from the market research firm Forrester Research predicts 14.4 million American workers will be using them by 2025.

Given those assumptions, the market for augmented-reality glasses like Google Glass could be worth between $1 billion to $2 billion in eight years -- if the product captures between 50 percent and 100 percent of it.

By way of comparison, Alphabet booked $90.3 billion in revenue last year, and Google's non-advertising businesses (including enterprise and Google Play) collectively booked just over $10 billion in 2016.

An email from CNBC to Google asking for the latest price on the device was referred to X, which declined comment.

To get there, Google will need to either find a distribution partner (or partners) with experience getting hardware into the enterprise or find a new way to market them at small- to mid-sized businesses.

Its current plan, according to a blog post by Jay Kothari, who leads the Google Glass project, is "collaborating with the Google Cloud team and our partners to help customers across a variety of business sectors make the most of Glass."

After years of trying, however, Google's cloud unit remains a distant third behind rivals Amazon and Microsoft.