This is kind of a sad story. In November, Snap Inc blew everybody's mind by releasing a surprisingly interesting piece of hardware. The camera-equipped sunglasses called Spectacles worked with Snapchat and looked cool. But a year later, the company reportedly has "hundreds of thousands" of unsold Spectacles sitting in warehouses in China. It's unclear if any of them will ever see the light of day.
Image: Snap Inc
The Information reports that Snap executives got a little too excited about the initial demand for Spectacles and basically made too many of them. Like, way too many. Tom Dotan and Reed Albergotti write:
Snap badly overestimated demand for its Spectacles and now has hundreds of thousands of unsold units sitting in warehouses, either fully assembled or in parts, according to two people close to the company. The disclosure undercuts Snap CEO Evan Spiegel's recent contention that Spectacles sales of more than 150,000 had topped the company's expectations.
That passage makes it sound like Spiegel basically lied, but it's possible he was simply saying that Spectacles sales beat his company's expectations for a narrow period of time. At the same conference where he made the sales remark, Spiegel also said that it would take "maybe a decade" before the Spectacles product was important to Snap. Together, the comments could mean that the extra units and spare parts are now earmarked for future versions of Spectacles to be built and sold at a future date.
Either way, it sure seems like somebody screwed up. And that somebody is not you, the consumer. Anonymous sources told The Information that Snap executives "were so enthused by early buzz about the Spectacles — there were big lines at first for the mobile vending machines that dispensed the glasses — that they ordered a huge amount". The only problem was that after Spectacles were readily available at places such as Walmart and Amazon, people didn't line up to buy them. They didn't have to.
The hype was real. Gizmodo veteran Christina Warren waited in line for five hours to buy her set of Spectacles. In her post about the experience, she calls herself "such an arsehole" multiple times for doing so, but she did it. Well-crafted marketing efforts have this effect on people. The thing is, once the stunt's run its course, the product at the centre of the campaign is laid bare, and consumers have to ask themselves whether they actually want that gadget without the distraction of being wooed by buzz. In the case of Spectacles, the answer to that question was apparently "no" for too many people.
This sucks for Snap. The hardware dreamed up by the semi-newly formed Snap Labs were supposed to build a future for the company that would be impervious to Facebook's nasty habit of ripping off Snapchat's software innovations. Snap was already exploring the possibility of selling its own drone. Last autumn, the company acquired Ctrl Me Robotics, a small LA-based drone startup. Snap was also in talks to buy the Chinese drone manufacturer Zero Zero Robotics, but The Information now reports that the deal fell through, perhaps because Snap couldn't afford the $US200 million ($256 million) price tag that the Chinese company was asking.
If you want to believe Evan Spiegel, none of this matters, because Snap is playing the long game with its hardware ambitions. "Give it a decade," Speigel seems to be saying. That said, the company might not have a decade. Snap's stock price has been trading below its IPO price for nearly a year, and the $US2.8 billion ($3.6 billion) in cash on hand the company had in June is disappearing quickly. User growth on Snapchat, the one successful product from Snap Inc, appears to be plateauing. Meanwhile, the extent to which Mark Zuckerberg and friends are stealing Snapchat's ideas has become so extreme that supermodel Miranda Kerr, wife of Evan Spiegel, started publicly shaming Facebook earlier this year.
The story of Snap Inc is a sad one, but it isn't a surprising one. Spiegel's sleazy history of promoting a fratty culture at Snapchat has always made it hard to root for his company. Then, when documents surfaced suggesting that Spiegel and his co-founders had stolen the original idea for Snapchat, one had to wonder whether these Stanford bros were even capable of creating anything new.
Spectacles, for what its worth, felt like a neat, new thing at first. Unfortunately, reportedly, they're just not neat enough.