Tech
Snap's Stock Plummets After $2,200 AR Glasses Unveiling
AI Summary
Snap's stock sank over 5% after unveiling its high-end AR glasses, Specs, priced at nearly $2,200. The company's stock has dropped 30% over the past year, and concerns remain about the product's profitability, particularly among its core teenage demographic.
The Downward Trend Continues
Snap's long-awaited AR glasses, Specs, didn't have the best debut. The company's stock hasn't been on the healthiest trajectory lately, dropping 30% over the past year. Following Specs' launch, it sank more than 5% — falling from $5.86 a share on Tuesday to a low of $4.83 on Wednesday morning.The High Price Point
The big concern surrounding Snap's new smart glasses — which the company has been working on for over a decade — is the cost: The company maintains they will retail at nearly $2,200 apiece. It's worthy of note that Snap's core user demographic — teenagers — are not typically equipped with that kind of pocket change, leading onlookers to question the profitability path for the new product.CEO's Justification
Snap's CEO, Evan Spiegel, did an interview with CNBC on Tuesday (during which he sported the new glasses) and, when questioned about the hefty price, responded: "The most important way to think of Specs is as a computer, and so they're comparably priced to other high-end computers or high-end laptops." Spiegel further justified the cost by saying that Specs occupies a unique space in the AR market between glasses like Meta's Ray-Bans — which cost a lot less but provide significantly less compute power — and bulkier headsets like the Apple Vision Pro, which are powerful but very expensive.The Future Outlook
- Snap's stock still hasn't recovered the position it held prior to the announcement.
- The company's ability to justify the high price point will be crucial in determining the product's success.