Opinion: Snap Inc.'s Massive Loss on Spectacles May Hint at Trouble for the Future of Mainstream AR Smartglasses

Snap Inc.'s Massive Loss on Spectacles May Hint at Trouble for the Future of Mainstream AR Smartglasses

The would-be role of Snap Inc. as the first step toward mainstreaming wearable tech in the form of glasses has stalled, and now we have proof. In the company's third quarter financial results report, released on Tuesday, Snap Inc. revealed that it will lose nearly $40 million due to unsold Spectacles, the camera glasses first sold at kiosks throughout the US.

"Unfortunately, we misjudged strong early demand for Spectacles and purchased more inventory than we now anticipate being able to sell," Drew Vollero, chief financial officer, said regarding the expenses for excess inventory and canceled purchase commitments. "Moving forward, we will continue to be in the market place with Spectacles and expect modest revenue from the product line."

But rather than dwell on the bad news, Snap CEO (and NR50 member) Evan Spiegel focused on reviewing progress for Snap Inc.'s 2017 priorities, namely performance, quality, and automation, while turning an eye towards its 2018 agenda.

"2018 promises to be a productive and exciting year for Snap, with many changes coming to our products and platform," said Spiegel in prepared remarks released in conjunction with its quarterly earnings conference call. "We will be hard at work delivering on our priorities: User Growth, Content, and Augmented Reality."

On the AR front, Snapchat plans to build on the usage of its World Lenses by opening its Lens Studio, a tool that will enable advertisers and creators to concoct their own Lenses. The company is currently testing the product with select partners.

Another key AR product is Context Cards, a feature that intertwines information and actions with content that the company introduced last month. Snapchat intends to bring additional partners on board with the product once more data is available on how the user community interacts with it.

In terms of user growth, Snapchat intends to court users by redesigning the app altogether to improve ease of use. That last part has surprised some observers who, because the company soared to popularity on the back of the app's quirky user interface, believe an interface change would be a mistake.

As for AR, at least for now, it looks like the job of pioneering tech-infused glasses, eventually leading to cheap, mainstream AR smartglasses, may fall to yet another company.

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Cover image via Spectacles/YouTube

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