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Spectacles were a flop. So Snap is going to charge more this time around

Sam Dean, Los Angeles Times on

Published in Science & Technology News

Snap Inc.'s newest camera-glasses are making headlines for their $380 pricetag and chic design.

But what's most remarkable, from a business standpoint, is how little money the company expects to make off its splashy new wearable.

Spectacles 3 got a sleek photo feature in Vogue for their debut, and their specs match the upmarket venue: steel frames, two cameras (allowing for 3-D recording), and that high sticker price, twice what the earlier plastic version, first launched in 2016, cost.

But charging more for them doesn't indicate Snap is bullish about finding a ready market. If anything, it's the reverse. Having failed to stoke demand for two previous iterations of the product, the company is treating this one as a niche offering and setting expectations accordingly.

The Spectacles 3 are available for preorder now, and set to ship in the fall, but the company says they will only be a "limited edition," with production just a fraction of the original version.

Michael Pachter, an analyst at Wedbush, called Snap's hardware play a "sideshow," adding that any profit it throws off is likely to be little more than a rounding error.

 

Just breaking even on Spectacles would be an improvement.

People bought more than 200,000 pairs of the first version after their 2016 debut, but Snap still ended up with $40 million in unsold inventory by late 2017, when it wrote off

the warehouses of unworn sunglasses as a loss. In the company's most recent earnings report in July, it noted that revenue from the second generation was "not material."

In the appeal to luxury consumers and the performative secrecy around development -- Snap granted Vogue interviews with the designers behind the Spectacles 3, but didn't allow the reporter to identify them by name -- Snap appears to be emulating Apple.

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