Snap (chat) – Spectacular experiment
Snap’s new product is a mere toe in the water
- Snapchat (now rebranded Snap) has launched spectacles that work in a similar way to Google Glass but try to deal with the many shortcomings of their predecessor.
- Snapchat (now rebranded Snap) has launched spectacles that work in a similar way to Google Glass but try to deal with the many shortcomings of their predecessor.
- The new glasses are aimed to be fashionable, can capture and upload 10-30 seconds of video and are priced to go at $130.
- The problems with Google Glass were legion but chiefly comprised of:
- First: They made other people uncomfortable.
- Second: They were ludicrously expensive at $1,500.
- Third: They looked dreadful.
- Consequently, it came as no surprise that wearers were shunned by the general public and that the product did not sell well.
- Snap’s Spectacles address the second and third issues quite well but we fear that its very young demographic might find it very hard to find even $130 for this product.
- The product also makes a stab at addressing the first issue by using a bright LED around the lens that makes it clear when the camera is on.
- How well this works remains to be seen but it is encouraging to see Snap acknowledging previous failures and trying to address them as well as leaving certain segments that are well covered by GoPro et al well alone.
- Since the time of Google Glass, video uploading has become much more common place and maybe the time is right for Snap Spectacles.
- However, no-one really knows how well this product will fare which is why Snap is launching this product very gradually.
- This makes complete sense as there are still plenty of potential pitfalls that could prevent the Spectacles from shipping in big volumes.
- At the end of the day this is an experiment and We suspect that even if the device ships in big volumes, Snap will not really make any money from it.
- Instead we see the aim being to drive video traffic to its site rather than that of YouTube or Facebook by making the user experience much easier and more fun.
- Facebook and YouTube dominate the market for mobile based video advertising revenues which is still growing very quickly and this is an important area for Snap as it moves into its monetisation stage.
- If it fails, we doubt we will see an Amazon or Microsoft-like $1bn write down of inventory but rather an ending of the product with barely a ripple.
- Snap has carved out a niche for itself but it must now find ways to monetise the traffic as it has a $20bn valuation to live up to.
- It has already made a start down this path but we see it as still well adrift of an income statement that will make investors in the last round happy.
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