1.8B...? not sure what you are talking about. In China, the molds for the frame don't cost more than 30kUSD (and thats on the high end). Not sure what the lenses do on the glasses so I'll hold off on an estimate. PCBs and off the shelf components have 0 overhead other than buying in MOQs which is inconsequential for snapchat.

I am talking about their recent Series F raise: https://techcrunch.com/2016/05/26/snapchat-series-f/

I think the commenter you replied to was questioning your assumption that 1.8bn was not enough money.

An investment of more than a billion for a wireless camera? Are you kidding? You could probably launch a product like this for $100.000 if you keep it lean.

Well in an age where every 18 year old's weekend hack project "needs" $1bn "to scale" to the next town over, this is just so ambitious!

People build these kind of projects on Kickstarter with far less than 1.8 billion though

In the past Snapchat has just used Amazon for fulfillment and sales of physical products

https://www.amazon.com/Snapchat-Inc/pages/10660293011

In terms of "hardware" Spectacles are almost a textbook example of what plenty of people with $0 funding do, tweak/private label a product from china and sell it on Amazon. Look at the range of "camera sunglasses" on Alibaba for starters.

The only difference with these are product design & software, two things that are core businesses for Snapchat. In terms of manufacturing, that custom Snapchat backpack would probably be trickier to get manufactured than this..

The fact that a product with less functionality than a $25 set of camera sunglasses on Alibaba is being compared to Google Glass really shows what a great PR/strategy move this has been for Snapchat.

If Snapchat is able to sell this product to only 5% of their 150M userbase that's 7.5M * $130 = 1B in revenue. Then they diversify their future product line somehow and keep selling to the other 95% of their users. Forget a re-monetization strategy for ads - ads make a product worse and it is refreshing that there may be another way for VC-backed companies to monetize.

How much of their userbase of 13-30 year olds wants to plunk down $130 for a toy? Less than 5%, I'd guess.

The <5% who are mega influencers on one of the most influential social networks on earth, as opposed to the <5% comprised of the dorkiest people on earth (not that I have anything against dorks, seeing as I myself am somewhat dorky).

You couldn't even wear Glass in Silicon Valley, land of graphic tees and dad jeans. I could imagine seeing these anywhere from Santa Monica to NYC or Lake Tahoe to Macchu Pichu.

Lots of people in the 13-30 demographic spend $100 on sun glasses or $200 on headphones. I don't think this product is out of reach.

Quadcopters, 'hover boards' are a good example. Lots of people age 13-30 buying them, and that's people can't save money. Buying stuff they don't need and would not use - only to look cool.

.005 if lucky

Devils advocate here. You overlooking quite a few things. Realistically, let's break some things down:

Background: Google Glass

Cost: $1,500 for early adopters (irrelevant) Cost to Manufacture: ~$100 USD Sale Price: $299 Margin: ~33% (low)? Probably. Yes!

Yes with economies of scale...blah....blah...blah...

Let's assume (I'll use the 150M, but I don't want to):

A. 5% of their 150M userbase that's 7.5M * $130 = $1B USD B. 5% of their 150M userbase that's 7.5M * $89 = $668M USD C. 5% of their 150M userbase that's 7.5M * $50 = $375M USD

Let's play with some more numbers because I think 5% is super generous. Why? Yes, Snapchat's demographic is 18-24 yr olds but as you may know, new users over 35 is growing at 2X. Personally, I am under the impression that this means Snapchat is losing it's appeal with their current demographic.

A. 1% of their 150M userbase that's 1.5M * $130 = $195M USD B. 2.5% of their 150M userbase that's 3.75M * $89 = $334M USD C. 3% of their 150M userbase that's 4.5M * $50 = $225M USD

$1B seems a bit off from your calculations. We haven't even factored in COGS, manufacturing costs, etc. Not to mention their margins will be extremely low until they square away manufacturing which could take several years. > Diversify their future product line...

I highly doubt it is going to happen.

> Forget a remonetization strategy for ads...

I agree! I didn't say it was the best idea, but snapchat will need to go all in or not. They can't put a toe in and decide the market isn't ready or they need to raise more capital - it will send the wrong message to investors.

Again, I am operating under the assumption that Snapchat is trying to become a brand.

You say 'realistically' but you're speculating that they are losing appeal and that they won't try and sell another product.

The only thing to realize is they have a $100+ device that is compelling to their 150M user base. That's a great sign. I think that the manufacturing chain for 'cheap shit electronics toys' is developed enough in 2016 to make good margins.

I would expect glass to have cost a multiple of that $100, with negative or no margin.

Snapchat only has a userbase because it's an application that runs on a cell phone.

Yeah and you know what userbase that is? Product hungry 15 year olds whose identity is tied to superficial shit just like this. Apple should have taught us something: People do not care about what they're buying, they just care that it's the 'cool' thing.

If they can make them at a cost of $0, sure