Snap's AR Glasses Launch Tanks Stock Price

AR Glasses Launch Tanks Stock Price">

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. It's dropped 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. As of this writing, the stock still hasn't recovered the position it held prior to the announcement. 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.

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. Spiegel said his product was both "highly wearable but also incredibly capable for immersive computing." Why this matters: The launch of Snap's Specs glasses has significant implications for the AR industry, particularly in terms of pricing and target demographics. With a price tag of $2,200, it's unclear whether Snap's core user demographic — teenagers — will be able to afford the device.

This raises questions about the profitability path for the new product and whether it will be able to gain traction in the market. For developers and businesses, the success of Specs will depend on its ability to provide a unique and compelling experience that justifies the high cost. For consumers, the high price may limit adoption, at least in the short term.

As the AR market continues to evolve, it will be interesting to see how Snap's Specs glasses fit into the broader ecosystem and whether they can carve out a niche for themselves.