Snap's Spectacles are underperforming both in terms of sales and user retention, the latter of which has been described a "shockingly low" by one person close to the company, The Information reported on Monday. The company behind social media app Snapchat reportedly has "hundreds of thousands" of unsold units on hand, with this state of affairs indicating it overestimated the demand for its camera-equipped glasses which allow users to quickly record and post short Snapchat video clips known as Snaps.
Snap Chief Executive Officer Evan Spiegel recently revealed that the Venice, Los Angeles-based company sold approximately 150,000 units of the Spectacles, adding that this performance was above the firm's expectations and not heavily below them like the latest report suggests. The device still retails for $130 and is on sale in the United States and parts of Europe. The ephemeral vending machines that were exclusively selling the Spectacles at first generated some artificial scarcity and buzz around the product but that business strategy didn't prove to be successful in the medium term, as indicated by the newly uncovered information.
The latest development suggests that Snap still isn't close to completely transforming itself into "a camera company" that the firm said it's seeking to become in the run-up to its initial public offering in early 2017. Snap's market performance is still worrying investors as the firm quickly dropped below its IPO price of $24.48 in March and never recovered, with its stock currently being valued at $14.90. Sources familiar with Snap's operations claim that some of its officials previously considered hardware to be the most viable road to sustainability and not just a way for the firm to differentiate itself in the highly competitive market. Snap has reportedly been exploring other consumer electronics projects in recent months, including drones and various handheld cameras, but no new products have yet been announced by the firm. The company recently made some minor layoffs and is planning to slow hiring for the time being, according to recent reports, with some industry watchers still criticizing Snap for not implementing concrete performance review standards and defining a method for evaluating its employees.