Tencent launches Spectacles challenger
Snap (SNAP) may have to work harder to make its Spectacles product a success now that Tencent (TCEHY) has launched a rival product. Spectacles are camera-equipped sunglasses that people can use to shoot video clips for sharing on Snapchat, Snap’s social app, which closed the third quarter of 2018 with 186 million daily active users worldwide.
Last November, Tencent launched its own version of Spectacles, TechCrunch reported, creating more competition for Snap in the market for camera-enabled sunglasses. The challenge from Tencent comes as Snap has been struggling to turn around its Spectacles business. Snap didn’t break out its revenue by product in the third quarter of 2018, making it difficult to estimate Spectacles sales. But revenue from the Spectacles business has been plunging in recent quarters mostly amid tepid interest in the product.
Third version of Spectacles failed to arrive in 2018
To try to revive interest in the product, Snap last year released the second generation of Spectacles, which commands a higher price than the original version. The company had been expected to release the third generation of Spectacles by the end of 2018, according to a report from Cheddar, but that didn’t happen.
Snap is trying to diversify its business outside advertising with Spectacles. Facebook (FB) has ventured into making smart speakers and virtual reality devices, and Twitter (TWTR) has gotten into licensing its data, all in an effort to create new revenue streams outside advertising.
Tencent and Comcast have interest in Snap
Although Tencent has moved to challenge Snap in the market for camera-enabled sunglasses, it has an interest in Snap, indicating that it still wants Snap to succeed. Tencent is one of the corporate investors in Snap. The other corporate investor in Snap is Comcast (CMCSA), which invested $500 million to purchase Snap shares during the company’s initial public offering in 2017, CNBC reported.