Snap, the struggling social media website, is believed to have been lumbered with stocks of hundreds of thousands of its Spectacles, launched last year, after wildly over-estimating demand.
Spectacles proved modestly popular in the US in the run-up to Christmas last year, but The Information claims that demand for the gimmicky gadget quickly dipped after Christmas and has remained moribund ever since.
The company had been expecting a surge in demand after pushing into new markets, leading it to order hundreds of thousands of additional units.
The glasses enable users to take photos and videos that can then be accessed via Snapchat, and saw Snap trying to boost revenues with sales of hardware to its user base. When they launched, Snap users could only purchase them from street kiosks.
To encourage more consumers to buy into the product, the company shifted away from the kiosks and opened up sales online. But the demand for the gimmicky product nose-dived after Christmas.
Much of the stock is sitting inside warehouses and will, sooner or later, need to be written off, affecting the company's financials. The exact sales figures of spectacles are unknown, but earlier this month, Snap CEO Evan Spiegel boasted that 150,000 units had been sold.
The Information reported that much of the firm's stock is in the form of unassembled units, and the parts could be used in future products.
Regardless, Spiegel insists that the Spectacles outsold Apple's first iPod in early sales and Spiegel doesn't appear ready to dump the product. Spiegel to TechCrunch earlier this month: "Our view is that hardware is going to be an important vehicle for delivering our customer experience maybe in a decade.
"But if we believe it's going to be important in a decade, we don't want to be starting a decade from now."
Led by a 150-person hardware team, The Information claims that the company is already working on other hardware efforts. However, a plan to build a Snap drone have already reportedly been scrapped.
However, the company is believed to be doubling down on tje Spectacles concept with the development of augmented reality glasses.
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