Snap may be shelving its wearables line after admitting it ‘made mistakes’ with its Snap Spectacles. The company has announced a loss of $40 million (£30 million) to its finances after its video-recording sunglasses failed to sell as well as expected.
Snap launched Spectacles in September 2016, originally selling them only through pop-up vending machines. They are now available online, however the popularity of the wearable device has been resoundly underwhelming. On Tuesday the company revealed costs of $40m (£30m) due to ‘excess inventory’ and cancelled orders.
Snao CEO Evan Speigel had previously announced that 150,000 pairs of Snapchat Spectacles had been sold, which at the time he said had exceeded the company's expectations, but that's no longer the case. Speigel has now admitted that he made a mistake with his previous forecast.
In a statement, Spiegel said: "We were very excited about Spectacles and by the initial reception and because we were so excited I guess we made the wrong decision and we were balancing the trade off with unit economics of course that come with hardware, but ultimately we made the wrong decision based on the early traction and ordered a lot of long lead time parts and ultimately weren't able to sell as many Spectacles as we thought we'd be able to based on the early adoption".
Snap has posted $207 million revenue in Q3 2017, which means a loss of nearly $40 million for the company. The company are now set to undergo a major redesign with its Android and iOS app set to be transformed.
Speigel said: "There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial longterm benefits to our business."
Whether or not Snap shelves its hardware plans remains to be seen.