Hundreds of thousands of unsold, unwanted Spectacles are sitting in Snap's warehouses, according to a new report, suggesting the company's first foray into hardware wasn't the success it was hoping for.
Snap, known for making the disappearing messaging app Snapchat, vastly overestimated demand for its newest product, The Information reports. Now piles of spectacles – trendy sunglasses that shoot short bursts of video to be shared via social media – are laying around, either fully assembled or in parts, two anonymous people close to the company told The Information.
That doesn't quite fit with Snap CEO Evan Spiegel's recent assertion that the company has sold more than 150,000 Spectacles – exceeding expectations and blowing away Snap's early goal of matching the 100,000 units Apple sold of its first iPod.
While it's hard to tell exactly where Snap stands on the Spectacles front, the company reported to the Securities and Exchange Commission that as of June 30, it had US$29mil (RM122.64mil) in hardware inventory, which likely relates to Spectacles, The Information reports. So far Spectacles sales appear to have pulled in as much as US$18mil (RM76.12mil).
The bright-coloured glasses generated quite a bit of buzz when they first launched, sold through weird yellow vending machines that looked like they had landed from another planet. But as the novelty wore off, and Spectacles started showing up for sale on Amazon, demand cooled.
And that's not Snap's only problem. Despite a strong first day showing following its March initial public offering, Snap shares have been trading below their IPO price for months. Disappointing earnings reports have helped fuel the drop.
And Snap has been laying off employees, cutting 18 recruiting jobs last week. The company previously laid off about a dozen people in its hardware division – the team in charge of Spectacles – in September, Business Insider reports.
But Snap may have other tricks up its sleeve in the hardware department. The company has been researching drones and augmented reality devices, The Information reports. Snap even considered buying Chinese drone company Zero Zero Robotics, but that deal fell through. — San Jose Mercury News/Tribune News Service