Looks like people aren’t as excited about Snap’s Spectacles as CEO Evan Spiegel had anticipated.
Just weeks after Spiegel said that Spectacles sales had exceeded expectations, selling 150,000 units rather than the goal of 100,000, reports show that hundreds of thousands of units are sitting unsold in warehouses.
First reported by The Information, Snap apparently overestimated demand for the glasses by a massive amount. Anonymous sources told The Information that Snap executives “were so enthused by early buzz about the Spectacles—there were big lines at first for the mobile vending machines that dispensed the glasses—that they ordered a huge amount.”
Read: Snap Is Laying Off More Employees, Plans to Slow Hiring in 2018
After the initial excitement around the Spectacles passed and attaining them online from Amazon or in stores like Walmart became possible, the hype died—and along with it, the demand. As a result, Snap has been unable to sell the units to consumers, and fully assembled Spectacles and parts are sitting in warehouses in China.
News of Spectacles underselling is the icing on the cake of a rough year for Snap. Its stock price has been trading below its IPO price for close to a year, and the company reported only $5.4 million in “other” revenue in Q2 of this year, down from $8.3 million the first quarter. Snap has also laid off employees and plans to slow hiring in 2018. Even user growth on Snapchat is apparently leveling out.
Investors will discover if Snap can paint a rosier picture when they announce Q3 earnings on November 7.