Spectacles are back again. Earlier this year on this blog, I wrote about Snap’s disastrous over-commitment into Spectacles inventories, and subsequent difficulties in selling the items, as thousands of inventories piled up. I argued that their sales figures were in fact not terrible in comparison to the first generation iPods, but it was the capital expenditure on inventories that crippled Snap’s venture into hardware. So, after Snap is back again with Spectacles 2. I cannot really figure that if the new designs of Version 2 are any better, but Snap definitely seems to be making some better operations and retail decisions. Here is coverage from Verge: Both the Veronica and Nico styles are available starting today (ed: Sept 5,…
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In analyzing Snap Spectacles, I discussed the value of early information, and argued how collecting early information is helpful. Production lead times for hardware products are long, and hence firms have to make huge commitments based on forecasts even before the demand starts trickling even as the product is being manufactured. Ideally, a firm would like its total production volume to match the final demand exactly. Being able to revise this production commitment can be a significant advantage. Even a small amount of initial demand can help correct orders or validate decisions with high confidence. Some recent data about VA 2017 elections from NY Times is useful in thinking about this problem in a different context. Below is a…
Leave a CommentI received an email note from a student in the Forecasting class (thanks: HT) about excess inventories of Snap Spectacles. The article on Information (subscription required) mentions that only (slightly more than) 150,000 units were sold and hundreds of thousands of unsold units sitting in warehouses. Snap contends that the sales exceeded their own expectations, but clearly the pre-sales expectations were high (as documented here and here). A lot of coverage was brimming with snark (some of it from the very folks who were excited about the product), and ex-post analysis of how bad the product is. I am no fan of Snap. However, I wanted to highlight a few points while providing a back-of-the-envelope framework to think about the…
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