During the fall of 2016, Snapchat reorganized and became Snap, while unveiling its Spectacles, sunglasses that could both record and share videos on Snapchat.
Snap created a huge amount of demand through hype for its Spectacles, the first foray by the social media site into hardware. On and off sales and marketing made the glasses difficult to find thus highly coveted.
When sales began, the only means in which to buy a pair of the glasses, at the price of $130, was camping out at one of the vending machines that appeared out of nowhere in different places in the U.S., including the Grand Canyon and Tulsa, Oklahoma amongst other locations.
Last November, Snap opened one of its pop-up stores in New York City. It was packed for weeks with customers attempting to purchase a pair of Spectacles. At the hype’s peak, Spectacles were selling on eBay for as much as $1,000.
Then Snapchat made the Spectacles much more widely available. They went on sale online with free shipping and at a number of different college bookstores, but the demand quickly dried up.
On Monday, a report released suggested that Snap was in possession of hundreds of thousands of Spectacles that were unsold. Earlier in October, Evan Spiegel the CEO said Snap sold more than 150,000 pairs, exceeding goals set internally for sales during the first year.
However, the report on Monday suggested the company expected or had prepared for much higher sales.
Many more tech companies that are far more established have struggled to move to hardware from software. The first attempt by Facebook to sell a smartphone was a huge failure, as was the first one made by Amazon.
Last month, Snap laid off 12 employees in its research division for hardware. The company was in negotiations to acquire Zero Zero Robotics the makers of drones, to create the next product following Spectacles, but a report said that the deal fell through.
Snap has not said how much was spent on the R&D for the Spectacles, or any other possible hardware on the horizon, but the sales figure for Spiegel of 150,000 would mean Snap generated revenue of more than $19.5 million for the sale of glasses.
The company that Snap bought to develop the glasses, Vergence Labs, charged between $300 and $500 for models that it sold, which could suggest Snap sold its Spectacles for a loss. Snap declined to make a comment on the pairs of glasses it may or may not have.