(Bloomberg) -- Snap Inc. is trying, again, to make smart glasses trendy.
The social networking company has been building tech-infused frames for nearly a decade as it attempts to make money in new ways besides advertising. It’s not alone. Amazon Inc., Alphabet Inc.’s Google and Meta Platforms Inc. have all tried to make smart glasses a thing, but none of them have gained much traction. For Snap, maybe the fifth time’s the charm.
The company’s latest glasses, called AR Spectacles, let wearers take images or videos to send through the Snapchat app. They also include augmented reality technology that can overlay the world with digital filters. The glasses are mostly designed for software developers, who can get their hands on a pair by applying online and paying $99 per month for a minimum of 12 months. Snap hopes to eventually sell the glasses to regular consumers as well.
Why Now?
Most of Snap’s $5 billion in revenue comes from advertising, but the company has been looking for other ways to make money. Chief Executive Officer Evan Spiegel has said he sees augmented reality, or AR, as a way to beat out Snap’s larger rivals, which includes Facebook and Instagram owner Meta. The company already sells ads on Snapchat that use AR, and also hopes to make money from hardware. More than 375,000 developers and creators are using Snap’s AR platform, according to the firm.
Snap’s glasses are clearly meant to compete with Meta, which released its latest smart glasses in partnership with Ray-Ban earlier this year. While Meta hasn’t shared numbers, it keeps saying that sales of the glasses – which don’t include AR but can take photos, record videos and play music – have been better than expected. News reports also suggest that Meta might unveil AR glasses at its annual developer conference next week.
Snap isn’t new to building smart glasses, but it’s had trouble selling them. The company launched its first pair of video-recording sunglasses, called Spectacles, in 2016. The glasses initially got attention for their colorful frames and because they were sold through pop-up vending machines. But again, consumers didn’t bite, and the company had to take a $40 million writedown on unsold inventory.
What Works
At first glance, Snap’s AR Spectacles look and feel like normal sunglasses, with a black finish and rectangular frames. But they have much thicker bands and lenses to accommodate two Qualcomm chips, along with tiny projectors that place digital filters in front of a wearer’s eyes. The glasses also have hand-tracking technology and augmented reality features that are powered by Snap OS, a new operating system the company designed.
In addition to the glasses themselves, the package includes a lens cover, glasses case and USB charging cable. The AR Spectacles connect to your phone through the Snapchat app, so you don’t need many accessories to get up and running.
The frames have two physical buttons: one that lets you capture videos, and another that powers the device on and off. The glasses also include a blinking LED light that flashes whenever you’re taking a photo or recording a video, as a courtesy to passersby. Other than those buttons, the glasses are controlled almost entirely by your hands. For most things you can use your hands like a computer cursor to select, drag, rotate or resize digital objects, among other actions.
After an initial learning curve, I found the hand tracking technology mostly easy to use, a few hiccups notwithstanding. In a Lego game, for example, I was able to grab virtual lego bricks and stack them on top of each other using my hands. I also did boxing, played golf and walked a virtual dog. It was all genuinely fun, even if the selection was limited.
The glasses were also easy to use inside or outside, because they seamlessly transition between clear lenses and tinted sunglasses.
The Caveats
Although the plastic-and-magnesium glasses are relatively sturdy, I found them to be bulky and heavy. They’re not as cumbersome as, say, virtual reality headsets, but I still had trouble keeping them on my face. I also personally care a lot about fashion and am otherwise picky about my sunglasses, so when I first saw the clunky, geometric Spectacles, I wasn’t excited to wear them.
The AR Spectacles weren’t actually made for people like me. Snap has made it clear that this is an early version it’s made available to developers, the people who will ultimately design the apps that could make the glasses more compelling. It’s an interesting strategy that explains some of the frustrations I had with the glasses, namely the limited content and high price point.
Even for developers, the cost of the subscription still clocks in at nearly $1,200, which seems like a lot for a pair of glasses they won’t actually own (and can’t keep when they cancel the subscription). Even if a consumer wanted a pair, there’s no way at the moment to buy the glasses outright and they’re priced significantly higher than other smart glasses on the market. (Meta’s glasses cost $300.) In order to use them, developers will have to apply through Snap’s Lens Studio, the company’s platform for making digital image filters.
The Competition
While there are some similar products that are available to consumers, including Meta’s Ray-Ban smart glasses and AI glasses from startups like Even Realities, many of them don’t offer augmented reality technology.
Apple Inc.’s Vision Pro headset, which also overlays digital filters onto the real world, could loosely be seen as a competitor, except it’s more expensive at $3,499 and requires users to wear a large headset over their face. Snap’s AR Spectacles are comparatively more affordable, but the experiences it offers aren’t as distinctive.
Ideally, smart glasses would look stylish enough to actually wear, but also let you listen to music, record videos and identify objects or people in real time. I just can’t see them being super useful beyond that. That’s where the Ray-Ban Meta smart glasses have the leg up. Although they don’t offer AR capabilities, they do a few practical things well, and that’s their selling point.
The Takeaway
Snap has struggled to compete with rivals such as Meta, ByteDance Ltd.-owned TikTok and Google’s YouTube, which have significantly larger advertising businesses. The company’s stock is down more than 40% this year as the photo-sharing app has struggled to realize returns from its heavy investments in advertising technologies.
It’s an odd time to splurge on smart glasses that aren’t popular with consumers yet. Especially when Snap is going up against Meta’s Ray-Ban smart glasses, which are much sleeker and have the pizazz that comes from partnering with a luxury eyewear brand. Not to mention, Meta has the extra cash to risk on side projects – the company’s advertising business generates annual revenue of more than $130 billion, after all.
With its rivals investing heavily in artificial intelligence, increasingly effective algorithmic feeds and core advertising technology, Snap’s bet on pricey smart glasses that so far have had limited consumer adoption is a risky one.
(Updates with additional detail in the fourth paragraph about developer participation on the AR platform.)
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