As it continues to duke it out with steadily worsening economic conditions, Snap is reportedly ceasing production of its Pixy Selfie Drone that it launched just four months prior. Snap’s $230 Pixy Drone is designed to fly a few feet above users to capture both images and videos, with the content then automatically uploaded to their Snap memories. The drone can fold up and cozily fit in your pocket, making it a highly versatile complement to your phone as a capture device.
No More Pixies!
Unfortunately, demand for the tool hasn’t been that great, with the Wall Street Journal reporting:
“Snap Chief Executive Evan Spiegel recently told staff during a regular question-and-answer session of the decision around the Pixy drone. The effort to halt further development of the project is part of broader reprioritization of company resources, Mr. Spiegel told staff.”
While Snap won’t stop selling Pixy just yet, it does seem that once the current supply runs out, then it’s out for good. It’s definitely a blow to Snap’s broader hardware expansion, though this wouldn’t be the first time that Snap has had to deal with demand that’s lower than expected.
Back in 2016, Snap released version 1 of its Spectacles camera-equipped glasses, which did attract plenty of hype in the beginning, but not all of it translated into huge sales. One year after the launch of Spectacles, reports circulated that Snap severely miscalculated the demand for the glasses, resulting in hundreds of thousands of unsold Spectacles units gathering dust in some warehouse in China. Snap CEO Evan Spiegel later admitted that they made the wrong choice in ramping production based solely on early demand.
This time around, that doesn’t seem to be the case. Instead, Snap’s simply struggling with tougher market conditions, forcing it to rationalize current expenditure to stay on track. Last month, Snap announced that it would ‘substantially reduce’ hiring as part of its broader cost-cutting efforts, while also issuing a profit warning back in May. This resulted in Snap now needing to scale back its expansion plans, which could also impact the future of its AR Spectacles which are still in development. For now, Snap might need to take the back seat as it works to maintain financial performance.
The Wrap
In light of its other decisions, it seems that there’s more than the deprioritization of the Pixy drone itself. Even if Snap were to cease Pixy production entirely, it wouldn’t really be a major strategic shift for it, given how the drone initiative was still in its early stages of development and is still isn’t a key element for the company just yet.
From a broader perspective, the announcement signals the scale of the impacts that Snap’s juggling to make sure it stays on track. Could that see a bigger reduction in Snap’s overall RnD costs? With their newer bets likely to be put on hold as Snap waits for things to stabilize, what’s up next for Snap to stay in the game?
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