Snap isn’t planning to “annualize” its Spectacles glasses, i.e. it won’t be releasing a follow-up to them over the course of this year, the company revealed as part of its consolidated financial report for the final quarter of 2017. Despite showing surprisingly positive results, the firm’s latest financials suggested its hardware push is likely to weaken in the near term, with Snap now committing more resources to Snapchat, both in terms of its general features and content meant to drive user acquisition and engagement rates. Insiders previously described the commercial performance of the Spectacles as “shockingly low,” claiming the Venice, Los Angeles-based company overestimated the demand for its first pair of camera-equipped glasses by hundreds of thousands units and lost millions of dollars on the venture.
While Snap attracted nearly nine million new people to its mobile service during the final three months of 2017 and is improving its revenue per user that should eventually allow it to have a turnover that will outpace its losses, the failure of the Spectacles marks a major setback for the company’s long-term strategy. In the run-up to its initial public offering held early last year, Snap presented itself as “a camera company” to investors, claiming it wants to deliver end-to-end solutions for creating and sharing content. The Spectacles were meant to be the first step in that direction, being able to capture short clips that users could automatically share through their Snapchat app as snaps. According to the most recent estimate, Snap only managed to sell approximately 150,000 units of the glasses as of November. With a price tag of $129.99, that would amount to under $20 million in revenue, a figure that can hardly cover the R&D and marketing costs of such a global venture.
Snap is still in the process of rolling out its major Snapchat redesign that separates content posted by friends from that created by brands and is also still reworking its Android app that it previously promised to rebuild from the ground up in order to offer performance that’s comparable to that of the iOS service. Save for rare exceptions such as Google’s Pixel 2 lineup, the Snapchat Android app still doesn’t use the actual camera of most smartphones and instead just screenshots the viewfinder on the majority of “compatible” handsets, hence delivering significantly worse results in terms of pure image quality.