Gadgets

Snap will expand distribution of Spectacles in 2017, but hardware remains an experiment


Snap, Inc. just released its IPO and there’s a lot to take away, but from a hardware perspective there’s not much present – which is actually telling in itself. The S-1 filing contains a few references to Spectacles, but they don’t suggest Snap’s view of itself as a camera company leans very heavily on its hardware products or pipeline. But that could still change, as it says it plans to expand distribution of Spectacles over the course of 2017.

In an introductory note breaking down aspects of its business, Snap does refer to Spectacles, its video-capturing sunglasses, as its “latest effort to reinvent the camera, but in a section immediately following that about its overarching strategy and opportunity emphasizes the broad availability of software products as a strength.

It also talks about Spectacles as an example of an effort to introduce “new and unproven products” involving technologies “with which we have little or no prior development or operating experience,” and says that Spectacles, which thus far have been sold via pop-ups only, “has not generated significant revenue” for the company.

Spectacles still sound very much like they’re in the experiment phase for Snap, as it say that the company “made, and expect to continue to make, significant investments to develop and launch Spectacles and we are not yet able to determine whether users will purchase or use Spectacles in the future.”

But there are signs that the experiment is going well, and could be subject to considerable expansion in the upcoming year. It sounds like we might see more traditional distribution models replace the pop-up mode, reading between the lines.

“We expect to experience production and operating costs related to Spectacles that will exceed the related revenue in the near future,” the filing states. “In 2017, we expect to continue to make substantial investments in inventory, marketing, distribution, and product innovation as we assess product demand. Additionally, we plan to significantly broaden the distribution of Spectacles, which will increase our costs and overall financial risk.”

Also of note is that Spectacles are regulated by the FDA, according to Snap, which it lists as a risk factor: “The FDA and other state and foreign regulatory agencies regulate Spectacles.”

We may develop future products that are regulated as medical devices by the FDA,” it adds, leaving the door open for other hardware devices that act as eyewear or have medical implications.

Snap also lists “Circular Video,” the round format for recorded media it came up with that lets video captured by Spectacles be viewed in either vertical or landscape mode, as a key step in its evolution as a camera company:

“Circular Video represents the evolution of our thinking around mobile video and the progression beyond our first vertical video format.”

Featured Image: Snap


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