Brief:

• Snap plans to sell redesigned Spectacles glasses that have two built-in cameras for $350, Cheddar reported, citing unnamed sources. The additional camera on the wearable glasses will let people create augmented reality (AR) effects in videos and 3D-like photo effects.
• The company reportedly plans to develop about 24,000 pairs of the upgraded, two-camera Spectacles, compared to 35,000 of the second version of the glasses that went on sale earlier this year. Snap ordered another 52,000 units of slightly updated Spectacles in September, according to internal numbers cited by Cheddar, to better manage inventory of the product that has yet to snag much popularity among consumers.
• The higher price point of the latest version is more than double the cost of the first round of Spectacles, which was first released in 2016 as Snap sought to develop a wearable gadget that worked seamlessly with Snapchat. CEO Evan Spiegel has said the company's longer-term goal is to make a headset that lets wearers see AR imagery overlaid on the real world, Wired reported.

Insight:

Snap upgrading Spectacles with AR and manufacturing less than 25,000 pairs to start indicates that the company could be taking a more modest approach to developing a wearable device after overestimating consumer demand for glasses that had a built-in camera. Snap ordered 800,000 units of the first version of Spectacles after generating early buzz around the tech, but lackluster sales led the company to write down $40 million of unsold inventory, per Cheddar. Despite the slow traction, Snap appears to remain undeterred in its longer-term goal of developing a headset to capitalize on its advances in AR imagery.

Snap plans to reach a break-even point for hardware in 2020, Cheddar reported. That goal is attainable if the company doesn't over-commit to producing Spectacles that might not sell, leading to costly write-downs. The company also needs more managerial stability in its hardware team, which has undergone several leadership changes in recent years. Mark Randall left his job as VP of hardware last summer, less than a year after being appointed to lead the group. He had replaced Steve Horowitz, who was moved to a different part of the company in September 2017, Bloomberg reported.

The upgraded headset comes as Snap continues to expand its AR efforts to foster a community of creators and developers who use its platforms. The company in June released Snap Kit to help programmers make software that works more seamlessly with its image-sharing app, which has 186 million users worldwide. Last year, Snap introduced its Lens Studio to allow more creators to easily make AR filters and lenses. Most recently, the company announced a partner program to help advertisers find creative shops that are certified to develop AR lenses for the social media app.