Snap doubles down on smart glasses with new independent unit

Snap will create an independent subsidiary ‍for its augmented reality smart glasses, as it looks to ​attract external investment and challenge bigger rival Meta in ‌the fast-growing wearables market.

The launch of ​the Specs unit, announced on Wednesday, comes as the success of Ray-Ban Meta smart glasses positions eyewear as an early frontrunner in the race for gadgets powered by artificial intelligence.

But wearables is a costly bet, requiring massive capital injection for hardware, software and ​research and design capabilities, where even slight supply chain ⁠disruptions can impact production goals. Earlier this month, a supply squeeze forced Meta to pause the international expansion of its Ray-Ban Display ​glasses and focus on fulfilling ⁠U.S. orders. While Meta develops its smart glasses with EssilorLuxottica’s Ray-Ban, Big Tech rival Google has partnered with Warby Parker.

Known for its Snapchat messaging app and ‌animated filters, Snap has been doubling down on AR, ‌which can overlay digital effects onto photos, videos and users’ views of their surroundings in ‍real-time. Specs smart glasses will feature an “intelligence system” to anticipate user needs and assist them with tasks. Snap’s shares were ‍up more than 2%. The company said the new unit would open its door to minority investment and is actively recruiting for nearly 100 global positions as it moves closer to the product’s launch.

Snap has invested more than $3 billion over 11 years to develop its AR glasses, co-founder and CEO Evan Spiegel said ⁠at the Augmented World Expo last year.

“Success will depend less on breakthrough hardware innovation, but ​more on ecosystem integration and software value,” said Francisco Jeronimo, ⁠VP of devices research at market research firm International Data Corporation (IDC).

Last year, Meta dominated the smart glasses market with a 70% unit market share, followed by Xiaomi Corp at 8.5% and Huawei Technologies ⁠with 2.7%, according to IDC.