In no uncertain terms, Snap's (NYSE:SNAP) first shot at hardware was an utter disaster in just about every way imaginable. Snap ordered far too many units, which resulted in inventory writedowns and other costs associated with canceling its purchase commitments with suppliers. Meanwhile, the company also lost money on each unit sold, and the product failed to generate any type of meaningful engagement. The percentage of Snaps that were created from Spectacles was a literal rounding error (I estimated it at 0.002% of all Snaps created in the year-ago quarter).
You'd think that with Snap's newfound frugality, it would be proceeding cautiously with any new hardware efforts. Sadly, the Snapchat operator still hasn't learned its lesson.
There's more where that came from
As first reported by Variety, the Federal Communications Commission has just published a regulatory filing that references second-generation Spectacles. The filing describes a "wearable video camera" that Snap is currently working on but does not include other specific details regarding the product such as what it looks like or any other included features. One of the few details disclosed is faster Wi-Fi in the form of dual-band 802.11ac.
The revelation corroborates a Cheddar report from last month that said the company was planning to potentially release two new versions of Spectacles in the foreseeable future: a new model this year in addition to a third-generation product in 2019 that incorporates two cameras. The second-generation model mostly seeks to improve performance instead of any type of major redesign or other "dramatic changes," according to Cheddar.
Spectacles are a liability
Investors appear optimistic about the news, sending shares higher today. However, that optimism could be misplaced, as Snap doesn't appear to have learned much from its prior flop. The Snapchat operator ate $38 million in inventory charges last year after hundreds of thousands of units collected dust in warehouses. In an obvious lie, CEO Evan Spiegel once claimed that Spectacles unit sales exceeded internal expectations, which can't be true given the company ordered way too many units from suppliers.
Snap bills itself as a "camera company," which is difficult to reconcile with the fact that the company's only camera hardware product is a total waste of time and money. As Snap writes in its regulatory filings, "We do not have significant experience with hardware products, and we have incurred Spectacles inventory-related charges and may incur increased costs in connection with the development, sale, and marketing of hardware products."