Snap Inc. will start selling its augmented reality glasses, Specs, on September 16. They cost $2,195. Pre-orders opened in June with a $200 refundable deposit, and shipping begins this autumn in the US, the UK and France.
In the shareholder letter, Evan Spiegel, chief executive officer of Snap Inc., described Specs as “a new kind of computer built into see-through glasses”. They handle directions, run an AI assistant, stream content and can drop interactive lessons onto a surface in front of you. Think of them as sitting between the featherweight camera glasses now sold by half the industry and the headsets that never made it out of the enthusiast bracket.
Spiegel has been straightforward about where this sits in Snap’s plans. “Our largest long-term opportunity is SPECS,” he wrote, adding that they are “designed for a future in which AI does more work on our behalf and people spend less time operating screens”.
Meta Platforms and Alphabet’s Google are spending tens of billions on AI models and the data centres to run them. Snap, a much smaller company, has put its money into the thing you wear instead. The glasses business was spun out as a separate subsidiary in January.
It helps that the rest of the business finally gave him room to talk about it. Snap posted second-quarter revenue of $1.6 billion, up 19 per cent, ahead of the $1.54 billion analysts had penned in. The net loss narrowed to $164 million from $262.6 million a year earlier. Daily active users reached 493 million, up from 483 million in the previous quarter, and third-quarter guidance of $1.7 billion to $1.74 billion came in above expectations. The shares rose as much as 12 per cent after hours, which is the sort of reaction Snap has not had much of lately — the stock is still down more than 37 per cent this year. Spiegel put the improvement down to better momentum with large advertisers in North America, stronger international growth and some World Cup money. Spending on Specs is already inside a full-year adjusted operating expense outlook of $2.75 billion, which has not moved.
Spectacles launched in 2016, camera sunglasses sold from bright yellow vending machines, and the queues did not translate into sales. Snap took a hit in 2017 on stock it could not shift. Later versions followed, including a proper AR pair in 2021 that was only ever handed to developers. Three attempts, no market.
So investors asked the obvious question on Monday’s earnings call: what makes this different, particularly with Apple and Meta circling the same idea?
“What is very clear to us is that the long-term opportunity to develop the next computing platform is absolutely enormous. If you look at what laptops and desktops did to desk jobs, the transformations in productivity and what that enabled for the world over the last couple decades has just been extraordinary,” Spiegel said. What makes Specs different, he argued, is that “they bring computing to the real world and to real-world jobs and allow you to work hands-free”. He also reminded the call that Snapchat arrived in a social media market everyone assumed was full.
On pre-orders, he was more careful. People want to try them first, he said, which is what you would expect at $2,195. The September 16 event, he suggested, is where the consumer conversation actually starts.
He is also not promising anything quickly. “I think it will be towards the end of the decade before we see mass-market consumer adoption,” Spiegel said. “I think things, for example, like weight and cost are going to have to come down to see unit volumes really meaningfully pick up.”
