Brief:

• Snap’s lab for making hardware such as the Snapchat Spectacles video-camera glasses cut jobs yesterday after changing managers earlier this month, Bloomberg News reported, citing unnamed sources. About a dozen jobs, primarily in marketing roles, were eliminated.

• Steve Horowitz, the former head of the lab, was moved to another job and given a title as vice president of technology, Business Insider reported. The hardware lab is now led by Mark Randall, a former vice president of operations who previously worked under Horowitz. Horowitz now reports to Snap Chief Strategy Officer Imran Khan, while Randall reports to CEO Evan Spiegel.

• Randall joined Snap last year after overseeing Google's supply chain for its Motorola division from 2012 to 2014, per Business Insider. Horowitz joined Snap two years ago after years of working on hardware products, including the Macintosh computer at Apple.

Insight:

Snap, like many social-media companies that are mostly focused on software development, started to create hardware products as a way of expanding the use of its mobile app while reducing the overdependence on smartphones made by other manufacturers. Hardware makers like Apple and Samsung have the ability to develop real technologies that affect the entire ecosystem of app developers while gaining a larger role in the user experience. 

Snap’s Spectacles have yet to become a mass-market item and its unclear yet if the latest news reflects the company walking back its commitment. Spectacles seem to be more of an experiment by a company that was flush with investor cash and a multibillion-dollar valuation. Now that the company is public, it faces greater pressure from shareholders to grow its audience, add original content and lure big-name advertisers as competitors like Facebook copy its features. During its last earnings call with investors, the company said revenue from the $130 Spectacles dropped 35% to $5.4 million in the second quarter from the prior three-month period. Snap is said to be developing a camera drone that will work with the app.

Still, brands have shown a penchant for embracing Spectacles, mainly for the ability to produce the kind of authentic and personal content that consumers are drawn to these days. For example, Burger King and Sainsbury's recently ran ads shot on Spectacles. Hyatt's new 'World of Hyatt' platform also uses Snapchat Spectacles. Given that Snap is eager to attract advertising dollars, Snap could look for ways to get Spectacles into the hands of more marketers. 

In any case, it is clear that mobile software companies and digital platforms will continue to make a go at hardware, given the significant benefits if they get it right. Google, which developed the Android mobile operating system that runs most mobile devices, depends on smartphone makers like Samsung to keep cranking out Android devices. Google this week is showing its intention of becoming more of a hardware company with its $1.1 billion deal with Taiwanese smartphone maker HTC to hire about 2,000 of its engineers and to license some of its technology. Google first got into hardware with $12.5 billion acquisition of Motorola Mobility in 2012. Three years later, the search giant sold Motorola to Lenovo for $2.91 billion while holding on to the Motorola patents.