As it continues to grapple with steadily worsening economic conditions, Snap Inc. will stop producing its Pixy selfie drone, which it launched just four months ago as a new way to capture content.
Snap’s $230 Pixy drone is designed to It flies a few meters above you and captures photos and videos, with the content automatically uploaded to your Snap Memories. The drone then folds up and can fit in your pocket, making it a useful addition to your phone as a capture device.
But evidently, the demand for the tool has not been huge.
As reported by The Wall Street Journal:
“Snap Chief Executive Evan Spiegel recently told staff during a regular Q&A about the Pixy drone decision. The effort to halt further development of the project is part of a broader reprioritization of company resources, Mr. Spiegel told staff.
Snap won’t stop selling Pixy at this stage, but it looks like once the current supply runs out, that could be it.
It’s a blow to Snap’s broader hardware expansion, though it’s not the first time the company has had to deal with lower-than-expected demand.
In 2016, Snap released the first version of its Spectacles camera-equipped glasses, which attracted a lot of enthusiasm early on, which didn’t necessarily translate into big sales. A year after Spectacles launched, reports circulated that Snap had miscalculated demand for the glasses and, as a result, hhundreds of thousands of unsold Spectacles they sat in a warehouse in china.
Snap CEO Evan Spiegel later admitted that the company made the wrong decision by ramping up production of Spectacles based on initial demand.
That’s not the same case this time, with Snap simply struggling with tougher market conditions, forcing it to streamline current spending to keep things rolling.
Last month, Snap announced that “substantially reduce” hiring as part of broader cost-cutting efforts, while in May it also issued a profit warning due to worsening ‘Macroeconomic environment’. Some of that can be attributed to the global recession, which has affected all digital platforms, while Apple’s ATT upgrade has also caused major challenges for Snap’s advertising business.
The bottom line is that Snap will now need to scale back its expansion plans, which could also affect the future of its AR Spectacles, which are still in development, and may now need to take a backseat as it works to maintain financial performance. .
That is why this announcement is more significant than the deprioritization of the Pixy drone itself. Really, if Snap were to stop producing Pixy altogether, it wouldn’t be a major strategic shift, as the product’s development is so early that it might not be a key player for the company yet.
But from a bigger picture perspective, the announcement points to the scale of the impacts Snap is facing, to ensure it stays on track.
Could that see a further reduction in research and development costs for Snap overall, and what will that mean for its long-term bets?
Not re-uploading the Pixy project is one thing, but the fact that Snap was forced to abandon it so soon is a potentially more important consideration in this change.