Speaking at the Vanity Fair New Establishment Summit, Snap Inc. SNAP CEO Evan Spiegel made a somewhat surprising announcement regarding his company's hardware venture, Snapchat Spectacles.
Spiegel confirmed that Snap has sold over 150,000 units of its camera-equipped Spectacles since its launch last year. The social media company was only expecting to sell 100,000 pairs. While this isn't the biggest number, Spectacles didn't have a traditional product launch. Instead, the devices were delivered through pop-up vending machines that would randomly show up in cities throughout the country.
Spectacles didn't become available online until February of this year, and now, you can purchase the glasses through Amazon.com AMZN ; they even qualify for Prime two-day shipping. Spectacles currently sell for $130, and come available in black, red, and teal.
"Our view is that hardware is going to be an important vehicle for delivering our customer experience maybe in a decade," he said. "But if we believe it's going to be important in a decade, we don't want to be starting a decade from now."
Spiegel then compared Spectacles' performance to that of Apple's AAPL iPod. When the iconic portable music player initially launched in 2002, it sold about 143,000 units after its first full year on the market. Spiegel also pointed out that the iPod was able to sell 300 million units during its lifespan, implying that because of this, Spectacles has a future.
Earlier this year, it was rumored that Snap was working on a new version of Spectacles. TechCrunch has reported that Snap may instead be developing an update to the hardware that would incorporate augmented reality technology.
It's no secret that Snap has struggled since its IPO in March. Shares of the company have lost over 40% since its public debut, but Spiegel admitted that selling Snap's long-term vision to investors hasn't been easy.
"One of the things I did underestimate was how much more important communication becomes," he said. "When you go public…you really need to explain to a huge new investor base, right - instead of having 10 new investors, you have 10,000 - you have to explain how your business works."
Last quarter, Snap reported both a top and bottom line miss, though daily active users grew 21% year-over-year. The company is tentatively set to report its third quarter financial results in early November, and Zacks expects revenues of $236 million on an earnings loss of 14 cents per share.
Snap is still unprofitable, which is not uncommon for young tech startups, and is the reason for its non-existent price-to-earnings and 'F' Value Style Score. Its price/sales is quite high at 27.63, especially compared to the broader Internet Software industry.
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