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February 20, 2017

Snap looks past snapchat app to hardware future after IPO

The Snapchat parent company looks set to move into the hardware business after it's upcoming IPO

By Joe Clark

Snap Inc. has proposed that it will build proprietary hardware as well as maintain it’s own software.

The parent company of temporary-photo messaging service, Snapchat, believes that it has the potential to continue it’s ad-based software business whilst simultaneously developing gadgets and hardware for consumers.

In the last year the company has hired hundreds of engineers, constructed a product development lab, and sought out acquisitions after declaring itself ‘a camera company.’

Snap is currently on an investor roadshow ahead of it’s upcoming IPO as the company seeks a valuation of over $20 billion.


In September of 2016, the company announced an Augmented Reality headset known as Spectacles, a normal looking pair of sunglasses that will allow users to upload videos and images directly to the messaging app. The hardware device came from it’s acquisition of Vergence Labs in 2014.

Snap has acquired over 10 startups since 2014 and in the spring of 2016 made the decision to hire 300 hardware specialists from high profile tech companies such as Apple, Google and Motorola. The company also created Snap Labs, to research and develop new projects.

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It is hoped that new gadgets will allow more interactions for existing customers and attract new users. In it’s fourth quarter of 2016 Snap had 158 million daily active users, though this was only a 3% increase on the same quarter in 2015 which saw a 14% increase over the year previous.

Currently Instagram and it’s parent company Facebook have launched their own versions of the ‘stories’ feature that made Snapchat so popular with its consumers.

It’s very rare that software companies manage to successfully establish a consumer hardware business, and few US firms make a substantial profit from hardware. Camera company GoPro stock currently sits 61% below its 2014 IPO price.

The Snap IPO is expected to go ahead as early as March and has been estimated at $22 billion.

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