Snaptacles ????

We have consistently talked about evolving business models such as “Hardware as a Distribution” model (see here) in tech space changing the competitive dynamics. We have also highlighted how the social messaging platforms are transforming into ecosystems (see here). This evolution and transformation of tech companies especially like Facebook, Snapchat, Google, Tencent and others are driven by building sticky ecosystems to get a lion share of hundreds of millions or even billions of users’ digital lives and digital wallet. The race to get the maximum share of this digital pie is what companies are after, to primarily cross-sell its own products as well as attract marketers, advertisers to their platform and in turn generate revenues from advertising. However, we have seen becoming more integrated in terms of business model, tech and ecosystem gives many of  these players greater advantage. While these companies excel at building sticky software, cloud based services but also foraying into own hardware is becoming critical. But hardware is just a medium to drive a tighter and controlled flow of content creation and consumption. We have also highlighted content is king though graphics is the emperor of content (see here). With advent and rise of Augmented Reality (AR) and Virtual Reality (VR) content, we are seeing newer head mounted form-factors of devices proliferating for both content creation and consumption.

Some examples of this trend being:

  • Facebook – Oculus VR
  • Google – Glass
  • Microsoft – HoloLens
  • Sony – PlayStation VR

and now Snapchat rebranding to Snap with business model revolving around snaps, video and so forth announced a new type of wearable camera integrated into the spectacles

  • Snap – Spectacles


  • Snap(chat) has more than 150M active users, with 40% coming from USA and almost a third from Europe, making it a more Western market phenomenon at this point
  •  However, this is from where the world’s bulk of the advertising and marketing revenue and spend comes from.
  • Snap has evolved from being a teen-messaging platform into a quite powerful advertising and newsfeed platform
  • Snap’s “GeoFilters” have been one of the most popular and effective features for marketers. For example:
    • 14000 McDonald’s restaurants are set up with Snapchat geofilters which have been used almost 12 million times generating more than 300 million views
    • Taco Bell’s Cinco de Mayo Snapchat Lens has been viewed more than 224 million times
    • Gatorade’s Super Bowl campaign that had more than 165 million views.
    • Many brands from Spotify to Kraft to VANS are getting on the Snap bandwagon to engage with 18-34 age demographics
    • Snapchat claims to reach almost 41% of the 18-34 year olds in USA on a given day
    • Snapchat users spend 25-30 minutes in the app every day,
  • Snap’s “Live Stories” is another powerful feature which is essentially story-telling with collation of snaps, video and filters from your contacts to brands (Snap Ads) to Snapchat curated stories with a potential to drive higher user engagement, which is becoming popular among brands
  • Snap Spectacles is a classic example of HaaD business model – selling a cool wearable camera to drive Snap’s ecosystem
  • Spectacles is the closest to ideal form-factor to drive (instinctive) user-generated content more than smartphone
  • More the user generated content or live feed content from Spectacles, higher the engagement making an attractive scenario for marketers leveraging the social media
  • Live news reporting via Spectacles on lines of CNN iReport when integrated with “live stories” could be very powerful transforming Snap into a live content platform
  • Snap might not do AR/VR at this point but the next generation Spectacles could potentially integrate different type of content from 360 deg video to AR type apps, location based ads and so forth making it a powerful wearable
  • Though Spectacles form-factor would be the first to be seen and rated higher on ‘intrusive privacy threat‘ than smartphones which could be a deterrent sometimes
  • Some might be skeptical to wear or use Spectacles at all time as compared to smartphone
  • Secondly, battery life + charging every few days might be a concern for some and if content is only allowed to shared via Snapchat app might make it less appealing for some.

In summary, we believe Snap Spectacles is from a new crop of wearable looking to solve a problem (engaging user generated content) rather beautifully than many previous “me too” wearables which have looked more like “solutions looking for a problem”

Video shot by Spectacles (Source: Snap)