Snap Inc.’s Increasingly Interesting Role in Augmented Reality

Around the time of its rebrand from Snapchat to Snap, Inc., the company released a pair of sunglasses with a camera installed. Tying directly into the Snapchat platform, Snap hoped to add hardware to its overall offering and entice buyers with direct platform integration. After a short time as a fashion fad, Snap Spectacles failed, with hundreds of thousands of unshipped products left over. Now, Snap is releasing an updated Spectacles with more simplified capture and share, as well as waterproofing. On the surface, it seems foolish to release a slightly improved version of a failed product; however, the idea of a cheap pair of glasses with a camera is sound, and Snap’s vision is wider than just glasses or even its current platform.

From the beginning, Snap Spectacles was not meant to propel Snapchat to market share leader; at the least, it was a marketing tool for the platform. It succeeded at this, but moreover, Spectacles highlighted a potential path for Snap to take outside of social media, and outside of even the photo/video capture and share bubble entirely. The Snapchat platform has offered augmented reality (AR)-like filters (Lenses for Snapchat) for some time, using facial tracking to overlay filters in real time for capture. Apple showed off a similar use case with its iPhone X and face capture sensor suite, but Snapchat is accomplishing the same thing—with very similar accuracy and quality—with only a single front-facing RGB camera standard on modern smartphones. The company has expanded this tech with Snappables, an attempt at social gaming with its filters front and center. Whether Snappables takes root or not is unimportant, but it is a showcase of technology first and foremost, and this tech draws attention to the wider AR market that has recently picked up steam in the consumer space, thanks to Apple’s ARKit and Google’s ARCore SDKs.

Snapchat is aware of the potential reach of its Lenses tech, supporting the creation of new Lenses with its Lens Studio. In fact, in another nod to the wider AR market, the company’s recent “Shoppable AR” push ties Snapchat into retail and e-commerce, one of the most promising upcoming AR verticals. Heavy hitters like Amazon and Wal-Mart are already adopting AR in various forms, such as interactive digital signage at home product interaction/viewing. Social media advertising is a market all its own, but Snapchat is positioned to leverage its social media presence through marketing and e-commerce, enhancing an existing revenue path and possibly adding new ones.

When viewed only as a new product launch, Spectacles 2.0 likely will not be a success; an increased price without any major advancements, and with the fad/fashion status gone, will prove difficult to ship units once again. For now, Spectacles does not have any display capabilities; without any screens, Spectacles do not fit within ABI Research’s definition of AR smart glasses. However, there is still inherent value in the device. Spectacles are a unique device type with potential, searching for a market that does not yet exist in the consumer space, but can be adapted to reach a large swath of the enterprise market. Snap itself will likely not win the enterprise market, but a similar idea will.

Remote expertise is the most popular use case for AR currently, whether on mobile devices or glasses. The most basic form of this only requires a video feed being sent to the remote expert, with audio capabilities to transmit instructions back. A display adds some visual capabilities to this, such as annotation and step-by-step direction, but for many potential customers, a cheap head-worn device that delivers the basic remote expert use case—while remaining comfortable and easy to use—will be more than enough.

Retail and commerce presents the most viable path to play in both consumer and enterprise markets, with ties to marketing and buyer experience on the consumer side and manufacturing, logistics, and marketing on the corporate side. Again, Snap is unlikely to invest heavily on the enterprise side, considering its strengths lie in social media. While they were short-lived, Intel’s Vaunt experimental glasses were headed on a promising path in enterprise and represent a relatively simple leap from Spectacles to a more complete AR glasses product. Given more time and a clearer market approach, a similar product would find a home in enterprise. A low-cost, limited-functionality pair of smart glasses would be appealing to a wide range of enterprise customers where “good enough” could save them millions both in upfront capital expenditure (CAPEX) AR investment and ongoing return on investment (ROI) with the AR implementation.

While unconfirmed, Apple’s AR rumor mill continues with an AR/virtual reality (VR) product supposedly in development. Whatever form this product takes from Apple, it will be targeted toward the consumer ecosystem, and yet will still find notable enterprise implementations (take the iPad as an example). Delivering functionality to whoever can use it makes sense, and success or failure comes down to proper marketing and inherent product quality. Snap has not quite nailed down either of those to the extent needed for widespread adoption of a head-worn device, but the potential is there for Snap or a competitor to jump in and realize an audience across consumer and enterprise users, which has always been the holy grail of the installed base.