Snapchat in September 2016 rebranded itself as Snap Inc. and introduced its first hardware product, sunglasses with built-in cameras. The wearable, dubbed Spectacles, was initially distributed via Snap's own pop-up vending machines but eventually made its way online.
Demand appeared strong at first but in hindsight, that might have just been due to their limited retail availability.
Snap's second quarter earnings report revealed that only 41,500 pairs of glasses had been sold during the three-month period, a 35 percent decline compared to the previous quarter. It doesn't appear as though the situation improved over the summer.
Two sources familiar with the matter tell The Information that Snap grossly overestimated demand for its Spectacles and now has hundreds of thousands of unsold units - either fully assembled or in parts - occupying space in warehouses.
If true, it'd be yet another setback for Snap which went public in March. Shares in the company are still trading below their IPO price.
Earlier this month, Snap CEO Evan Spiegel said his company had sold more than 150,000 units during the first year of availability.
Snap's hardware team now consists of around 150 people, the publication notes. There's been chatter in recent months that Snap is working on a drone although with so many excess Spectacles sitting around, it's plausible that those plans are on hold. Conversely, Snap could conceivably use some of the extra components from its glasses in other hardware products.
Second image via Trending All Day