As Apple gears up for AR headset, Snap writes off $39.9M in unsold Spectacles

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in iPhone
Snap this week dramatically missed Wall Street estimates, reporting a net loss of $443.2 million -- with a big write-off of $39.9 million in Snap Spectacles about a year after release. Should Apple jump in to the headset market as rumored, Snap's own wearable ambitions may only get worse.




In its quarterly earnings statement, Snap said that it had misinterpreted "strong early demand" for the wearables, and ordered far more Spectacles than it needed. Aggravating the problem, more consumers returned the product than predicted.

Out of the $207.9 million in revenue the company reported, a "substantial amount" of the $5.4 million in "other" revenue category came from the spectacles.

As a result of the earnings fumble, the company will be completely redesigning the Snapchat app, and warned of a "strong likelihood" that the process will disrupt the business in the short term.

"We don't yet know how the behavior of our community will change when they begin to use our updated application," Snap CEO Evan Spiegel said. "We're willing to take that risk for what we believe are substantial long-term benefits to our business."

A pair of Spectacles cost $129.99 at release, and is still bundled with a charging case and cable. Black, coral, and teal colors of the Specs are available. In February, expenses for the Spectacles were greater than earnings -- a trend that continues to present.

Snap's first hardware is superficially similar to Google Glass, but designed only to shoot between 10 and 30 seconds of first-person video, mostly for use with Snapchat. The video is also recorded in a unique circular format, meaning that people watching a clip in Snapchat get a seamless view regardless of which way they're holding their phone.

Apple is said to be hard at work on a full-fledged augmented reality headset for launch as soon as 2020, running a new operating system dubbed "rOS" and codenamed "T288." While likely intended for augmented reality, any rumored headset will be able to snap pictures or take videos of what the wearer is looking at.

Additionally, a rumor started on Facebook claiming that the service would be shutting down because of "copyright and legal issues" -- which has since been addressed on the company's @Snap and @Snapchat Twitter accounts.

For everyone wondering @Snap is not shutting down. It's a prank pic.twitter.com/JFBotaazvh

-- dani (@daniellemerkin)

Comments

  • Reply 1 of 17
    calicali Posts: 3,494member
    And Snap did a way better job than Giggle so I’d imagine this is a hard nut to crack. 
    lkruppwatto_cobralolliver
  • Reply 2 of 17
    Snap is done. Could look trying to change their structure when the founders control all the voting rights. 
    watto_cobra
  • Reply 3 of 17
    sergiozsergioz Posts: 338member
    Silly Snapchat, making all rookie mistakes.
    watto_cobra
  • Reply 4 of 17
    flaneurflaneur Posts: 4,526member
    cali said:
    And Snap did a way better job than Giggle so I’d imagine this is a hard nut to crack. 
    I think the problem is that both Giggle and Snap did it in mono instead of stereo, and stereo is still ahead of its time, waiting for a non-clunky display method.

    Which Apple is hopefully working on . . .
    watto_cobra
  • Reply 5 of 17
    lkrupplkrupp Posts: 9,462member
    cali said:
    And Snap did a way better job than Giggle so I’d imagine this is a hard nut to crack. 
    This should be learning experience for both companies and tech types who populate online forums. Tech enthusiasts are often blinded by the technology and don’t see the social and privacy issues that technology presents. When Google brought out Glass as a limited test of the technology the techie crowd pounced on it as the next big thing. Then the technology got a taste of crowd psychology and the term “Glasshole” was born. You can argue till you’re blue in the face that the fear was unfounded but it was real. Now Snapchat has learned a hard lesson too. So we have a rumor that says Apple is investigating similar technology using AR. If they are then hopefully they’re smart enough to learn from previous failures of such products.

    The next time some tech troll starts castigating Apple for being “years” behind on some feature, some screen technology, think about it before buying into the criticism. Maybe Apple is just sitting back and watching. The Oculus Rift CEO made a point of saying they wouldn’t support macOS until the hardware was up to snuff. And how many times has Oculus been in the news lately? 
    edited November 2017 fotoformatDavidAlGregoryGG1jony0russwwatto_cobraanantksundarampscooter63
  • Reply 6 of 17
    maestro64maestro64 Posts: 5,005member
    Image that, Geek Glasses did not sell yet again. When is the Geek world going to learn just because it neat and you can do something like this does not mean people will buy it. This is why Geeks only make up 5% of the population and the other 95% of the consumers never buy in. The geeks think the other 95% is short sighted. Luckly Apple had Steve and he understood how to in-geek technology so the 95% would buy.
    edited November 2017 entropyswatto_cobra
  • Reply 7 of 17
    Remember when Snap was just an app on the store? 
    Apparently these days everybody wants to monetize every app trying to be the next Facebook or whatever.

    Back when the glasses were first out they followed a plan to limit availability with pop up sales instead of releasing it to the broad market. Apparently that strategy did not scale very well. They missed a window to scale and then came the knock offs.

    since Facebook ripped the, off they have been slowly circling the bowl on their way down the sewer pipe. My guess is that we will read they have filed for bankruptcy unless someone buys them out for Intellectual Property- if they have any locked down at the USPTO.
    watto_cobra
  • Reply 8 of 17
    macguimacgui Posts: 2,045member
    Oh, snap! Wether ill advised or what, it's still a little sad to see such a loss. For Apple it would be pocket lint. For Snap, this could be the fork.
    watto_cobra
  • Reply 9 of 17
    Losing a half billion dollars a year is not a business. It’s a sinkhole.
    watto_cobraanantksundarampscooter63
  • Reply 10 of 17
    macxpressmacxpress Posts: 5,172member
    This was a stupid idea from the start and I saw this coming since the original release. I don't know who at Snap thought would be a seller. Sometimes I wonder who is actually running some of these companies and what actually goes on inside their heads. 
    russwwatto_cobra
  • Reply 11 of 17
    A software company, may, a social network app maker getting to hardware business is not as simple a building the hardware and sell. Microsoft is a good example. When a hardware and software company is cautious and taking its time to create VR products, it’s reckless for a software company or social media app company to try and jump ahead just to be first—it literally is costly. Google, MS, Snap, Amazon are excellent example. 

    Im not really into VR goggles, but I can say with very high certainty that I’d be giving Apple VR product a try if and when it’s available. 
    watto_cobra
  • Reply 12 of 17
    maestro64maestro64 Posts: 5,005member
    macxpress said:
    This was a stupid idea from the start and I saw this coming since the original release. I don't know who at Snap thought would be a seller. Sometimes I wonder who is actually running some of these companies and what actually goes on inside their heads. 


    Probably one of those google x engineers who get bonus checks for failing at making a product like google glasses, they probably figure with the google glass failure under their belt they would be successful yet again. This is a typical example of if you do not study history you destine to repeat it. There is plenty of Tech failures these people are not looking and understanding why they failed.

    Snap & Google failed for the same reason this failed

    and why this fail

    watto_cobra
  • Reply 13 of 17
    The problem is that those glasses where heralded as the biggest selling thing ever made, all other companies look out. The issue is that almost nobody will remember the failure.
    watto_cobra
  • Reply 14 of 17
    jd_in_sbjd_in_sb Posts: 1,600member
    Amazing that companies copy google glasses even though it was a very public failure. Whatever happened to copying successful products? Has that gone out of style?
    watto_cobra
  • Reply 15 of 17
    if apple is smart, they'll only use the camera for local image recognition, and not enable photos or video recording for their initial headsets...no need to make it seem like it's just an always on camera when there's far more they can accomplish via AR.
  • Reply 16 of 17
    What do Snap Spectacles have to do with AR?  Aren't they just sun glasses with a built in camera?
    LordeHawkwatto_cobra
  • Reply 17 of 17
    macguimacgui Posts: 2,045member
    alandail said:
    What do Snap Spectacles have to do with AR?  Aren't they just sun glasses with a built in camera?
    If that were the case, and they didn't have the goofy contrasting circles (I guess to warn everyone you're not doing covert surveillance) they might have done better.

    But instead:

    https://storage.googleapis.com/spectacles/f9fe5b8e-df6b-4855-8281-9aa879b36efd/home/gallery/roller-coaster.mp4

     https://www.spectacles.com
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