Prior to its long-anticipated IPO earlier this year, Snap Inc., the parent company of Snapchat, had a intriguing message for investors: “Snap Inc. is a camera company. We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate.”
The first test of Snap’s hardware-focused mission came in the form of Spectacles, a pair of sunglasses equipped with a video camera that records clips, or Snaps, of up to 10 seconds.
In development for more than a year, Snap co-founder and CEO Evan Spiegel first tested Spectacles while on a trip with his fiancee, and recounted, “It’s one thing to see images of an experience you had, but it’s another thing to have an experience of the experience. It was the closest I’d ever come to feeling like I was there again.”
With a design that seemed to appeal to Snap’s young users and a price tag of just $130 – far lower than Google Glass – it appeared that Spectacles had a real shot at success. Long lines at the pop-up vending machines the company initially sold Spectacles through seemed to validate that notion.
But fast forward a year and Snap apparently has a huge Spectacles debacle.
While Spiegel says that Spectacles sales, which totaled approximately 150,000, exceeded his company’s expectations, reports suggest that his company “now has hundreds of thousands of unsold units sitting in warehouses, either fully assembled or in parts” after it “badly overestimated demand” for the devices.
What’s more, according to Business Insider, “Snap’s internal data showed that well under half of Spectacles owners continued to use the camera-equipped sunglasses after just four weeks.”
Bad news for marketers?
At the Vanity Fair’s New Establishment conference earlier this month, Spiegel told attendees, “We’re just sort of beginning to dabble in hardware,” but with Snap burning through the cash it raised in its IPO, it’s not clear how many chances the company will get to prove that its ambitions as a camera company aren’t misplaced.
While the reported Spectacles disappointment doesn’t directly affect marketers who have flocked to Snap in recent years, the problem for marketers is that if Snap’s hardware strategy is a flop, it could call into question the company’s future.
Afer all, with Snap having already surpassed Twitter, which was previously arguably the strongest competitor to Facebook in the social ad market, a weak and potentially fatally wounded Snap would not only leaving social media marketers more dependent on Facebook ads but strengthen the overall Facebook-Google duopoly in online advertising.