break The fifth generation of Spectacles augmented reality glasses, which overlay digital graphics onto the physical world, was released on Tuesday.
The latest Spectacles are only available to developers, who must commit to paying $99 per month for a year if they want to build AR apps for the device. The glasses produce more dramatic digital visuals than previous versions and are built on a redesigned software operating system called Snap OS.
In addition, Snap has partnered with ChatGPT creator OpenAI to provide developers with tools so they can build and port artificial intelligence capabilities to smart glasses.
Snap’s announcement comes days ahead of rivals Yuan Connect event, a conference where Facebook’s parent company typically unveils its latest hardware. Like Meta, Snap has been trying to get into consumer hardware for years. Unlike Meta, Snap’s core online advertising business has been struggling.
snapshot stocks The stock price fell more than 20% after the company’s financial report was released. Latest quarterly results for August. Investors balked at lower-than-expected third-quarter guidance, and the company’s second-quarter revenue fell short of analysts’ expectations.
The day before, Meta announced better-than-expected quarterly results, causing the stock price to rise 7%. Still, Meta’s AR and VR bets continue to lose money – the company’s Reality Labs division released a $4.5 billion loss Season 2. The unit is responsible for the company’s Quest virtual reality device and Ray-Ban smart glasses.
Since 2020, Meta has invested more than $63 billion in hardware research and development. The company has yet to find meaningful success, but Wall Street is being patient with Reality Labs because the company’s advertising business is booming.
Meta’s advertising sales in 2023 will be US$131.9 billion, with full-year net profit of US$39.1 billion. In comparison, Snap’s total revenue in 2023 will be $4.6 billion and its net loss will be $1.3 billion.
“The challenge we face now is that Snap operates on a different scale than Meta,” said Leo Gebbie, principal analyst and director at CCS Insight.
In order to lead and influence the entire VR market, Meta sold the Quest VR headset at a loss, and Gebbie said he expected the company to adopt a similar aggressive pricing strategy if it launched its own AR device. For Snap to compete, he said, the company’s AR device would have to be “something really impressive” that incorporates the best qualities of its core Snapchat app and appeal to a younger crowd, setting it apart from Meta. .
Snap doesn’t release financial data for its hardware business like Meta does, but the company has been struggling to find success in hardware sales.
break debut In 2016, the company launched its first internet-connected Spectacles, a $130 device that was a simple way for users to shoot short first-person videos and post them to Snapchat. A year later, SP disclosed The company took a writedown of nearly $40 million due to losses on unsold Spectacles, underscoring the challenges it faces selling consumer hardware products.
Since then, the company has released other versions of its glasses smart glassesincluding a 2019 version priced at $380. Further improvements are needed before wider release.
In addition to glasses, Snap said in 2022 it will Stop development A few months later, the Pixy flying camera drone arrived release $230 gadget.
To stay ahead of Meta with its latest AR glasses, Snap is adopting a strategy adopted last summer by Facebook parent company CEO Mark Zuckerberg. Details disclosed The company’s Quest 3 VR headset a week ago apple announced the much-anticipated Vision Pro VR Headset.
Much of Meta’s AR strategy involves incorporating some AR features into its Quest-branded VR headsets, as well as launching Ray-Ban Meta smart glasses produced in partnership with EssilorLuxottica. The two companies announced on Tuesday an expanded partnership to continue developing smart glasses.
Although Meta does not release sales data, Zuckerberg have Tell Analysts said Ray-Ban Meta glasses, which launched in October, “continue to perform well and are sold out in multiple styles and colors, so we are working hard to produce more styles and launch more styles as soon as possible.”
Snap CEO Evan Spiegel has focused the company’s hardware efforts on camera technology, which he believes is a natural fit with the core Snapchat app and its 850 million monthly active users.
It’s unclear how long investors can tolerate Snap’s hardware push.
“We’re seeing Reality Labs’ losses widen quarter after quarter, and investors are happy with that because Meta is making enough profit from its advertising business,” Gebbie said. “Snap is much more constrained. On the hard side, It will be extremely challenging to compete meaningfully physically.”
