Snapchat maker Snap has announced the creation of a new business dedicated to its upcoming AR glasses.
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The wholly owned subsidiary within Snap, called Specs Inc, is said to allow for “even greater focus and coordination” ahead of the public rollout of its latest AR glasses, scheduled for later this year.
In addition to operating its AR efforts directly under the new brand, Spex will also consider “new partnerships and capital flexibility,” including the possibility of minority investment, Snap said.
Snap Glasses 5th Generation (2024) | Image provided by Snap Inc
In September, Snap CEO Evan Spiegel wrote in an open letter that the company faces a make-or-break “melting pot moment” in 2026, characterizing specs as an essential part of the company’s future.
“In this moment, it’s not just about survival; it’s about proving that alternative ways of building technology that deepen friendships and inspire creativity can thrive in a world that often has the opposite effect,” Spiegel said.
The company has not yet revealed the specs for the next generation, but the company is touting the AI built into the device. It “uses our understanding of you and your world to help us get things done on your behalf, while protecting and respecting your privacy.”
Snap goes on to say that it is “developing computers that we hope will help you use less because you can do more.”
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Snap (or rather, Specs) is set to release its sixth-generation Spectacles this year, ostensibly the first line of AR glasses the company wants to market directly to the general public, not just developers and educational institutions.
Information on Spec Inc’s device launch plans is still sparse, but forming a new legal entity for its AR business right before that could mean a few things.
So far, it doesn’t look like Snap is properly “spinning out” Spectacles. Since Snap hasn’t announced a new management team, I think this is more of a play to not only attract more targeted investment into its AR efforts, but also protect the company from potential failure.
Snap Glasses 5th Generation (2024) | Image courtesy of Snap Inc, Niantic
While everything is pretty unclear at the moment, this move will give investors a clearer choice between supporting the company’s traditional advertising business or investing in its AR future.
But no matter how you slice it, AR hardware development is capital-intensive, and Snap’s pockets aren’t as deep as those of its direct competitors like Meta, Apple, Google, and Microsoft.
Snap admitted that it spent $3 billion over 11 years developing its AR platform, which is significantly less than what Meta typically spends in a quarter on its XR Reality Labs division.
It’s also dangerous. The very real flip side is that Specs Inc could go bankrupt. Maybe it’s still early. Your offering may be inadequate compared to your competitors. Perhaps it’s too expensive for consumers, so it might actually only be attractive to businesses. Perhaps it’s not that expensive, but the world is facing its sixth once-in-a-generation economic collapse.
Simply put, there are a lot of “might”s right now. And given the new legal separation, Snap still has the option to survive the bankruptcy relatively unscathed and live to find another axis of survival.
