The Information published a report this Monday citing internal sources at Snap Inc. saying that the company is sitting on hundreds of thousands of Spectacles a year after their debut. The hype over the camera-equipped Snapchat sunglasses quickly faded out after they became widely available this year.
CEO Evan Spiegel reportedly plans a wave of layoffs, preceded by trimmings in both the recruitment department of the company and the hardware development division. The latter, coincidentally, was responsible for the creation of Spectacles.
Snap as a company is still struggling to meet the industry and investors’ expectations months after their initial public offering. Their stock has traded disappointingly since then, while its biggest rival, Facebook, has thrived in almost every developmental aspect.
Spectacles are sitting in piles in Chinese warehouses
When Snap originally launched Spectacles almost a year ago, they were an instant hit. The marketing campaign was on point, and the sales strategy with pop-up vending machines made it a hot item that wasn’t just novelty.
The sunglasses were hip and functional; as they took both pictures and snaps you could upload directly to your Snapchat account once paired with your mobile device. Spectacles cost $130, and many were willing to spend not only the money but also priceless time on queues waiting for the hot gadget.
Now, Snap has sold over 150,000 units and made almost $20 million out of Spectacles, but they seem to have grossly overestimated the demand for what once was an exclusive tech item.
They are currently retailed at Walmart and other common locations where you can acquire them for the same price, but sources inside the company told The Information that Snap apparently has warehouses full of Spectacles readily assembled or in parts waiting to resupply store shelves that are not emptying.
Scoop: Snap’s misfire on Spectacles https://t.co/DRGCQfoOAr pic.twitter.com/xHm6osXkpM
— The Information (@theinformation) October 23, 2017
Snap’s growth might soon be coming to a halt
Earlier reports suggest that Snap’s meteoric rise might plateau anytime soon. Last month, the company laid off workers in two departments, including 18 people working at the division responsible for Spectacles. CEO Evan Spiegel also said that recruiting in 2018 will slow down significantly.
The social media/camera manufacturing firm was in talks with the Chinese drone maker Zero Zero Robotics to acquire them as part of Snap’s next hardware development phase. Sources confirmed that that window has also closed, so there is little space for growth in that area, apparently.
Another source of concern for Snap, allegedly, is the fact that both its workforce and its user base are coming to a halt, as the company sees itself forced to let people go and fewer new users engage with the platform on a regular basis.
Source: The Information