Snap, the parent company of Snapchat, showcased its hardware ambitions with Spectacles. They’re a pair of glasses that aim to make it easier for users to Snapchat parts of their day easily. There was a lot of hype about this product initially but it couldn’t maintain the momentum. It was recently reported that Snap was sitting on countless unsold units of the Spectacles. The company’s latest earnings result reveals that they unsold stock is worth $40 million.
It hasn’t been that good for Snapchat in the past quarter. The earnings were below Wall Street expectations. That and other factors have caused the company’s stock to drop almost 20 percent in value in just a couple of days.
Snap has revealed in its Q3 2017 earnings statement that the Spectacles have cost the company $40 million. It explains that this is “primarily related to excess inventory reserves and inventory purchase commitment cancellation charges.” Simply put, Snap made more units than it could sell and now it doesn’t know what to do with them.
It was reported last month that the company sold over 150,000 units of Spectacles. Many customers who did purchase them ended up returning them back to the company. Snap was believed to have a couple of hundred thousand units of Spectacles just gathering dust in a warehouse somewhere.
Snap is still believed to be working on new AR glasses that offer a lot more functionality. It was rumored to be working on a drone as well but the failure with Spectacles has apparently made it give up on that idea.
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