uploads///snap quartely revenue

Why Snap Hasn’t Been Pleased with Spectacles’ Performance

By

Dec. 4 2020, Updated 10:53 a.m. ET

Low Spectacles usage

Findings of a recent small survey paint a disturbing picture for Snap’s (SNAP) Spectacles smart glasses business. According to Barron’s, which cites a survey by Aegis Capital, the hype around Spectacles appears to be fading.

Two important observations emerged from the study. One, none of the Millennials surveyed had purchased Spectacles or knew of anyone who had. Two, none of the respondents had seen anyone at beaches or amusement parks over the July 4 holidays with Spectacles. Thus, analyst Victor Anthony of Aegis Capital believes that Spectacles could suffer the same fate as Google Glass from Alphabet’s (GOOGL) Google.

Article continues below advertisement

Same fate but different levels of pain

However, the failure of Spectacles could produce more excruciating pain for Snap than the failure of Google Glass produced for Google because of their financial impact. While Google Glass has a negligible impact on Google’s revenues, Spectacles are a vital part of Snap’s business. In 1Q17, Spectacles were the primary contributor of the $8.3 million in income reported under the company’s “other revenue.”

Snap generated $150.0 million in revenue in the quarter, and 5% of that came from Spectacles. The above chart shows Snap’s quarterly revenue trend.

Spectacles are central to Snap’s camera company claim

Furthermore, given that Snap describes itself as a camera company, market participants closely watch how its camera products perform. Otherwise, Snap relies on advertising for the majority of its revenues. Thus, it competes with Facebook (FB), Google, Twitter (TWTR), Yelp (YELP), and Groupon (GRPN) for online advertising spending.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.