Snap Inc. is going all-in on the virtual reality smart glasses, regardless of whether or not users like them. On Friday, Snap Inc. has agreed to buy WaveOptics, which provides the AR displays that power its lenses, for more than $500 million, just days after unveiling the next generation of its Spectacles series.
Snap Inc. reported the offer is worth over $500 million in cash and stock in an emailed statement to TechSquare. They will pay half upfront in stock, and the rest will be paid in stock and cash over the next two years.
WaveOptics primarily develops waveguides, which are the displays within AR glasses that allow visual images to be imposed on the real world.
WaveOptics uses the lenses in Snap’s fourth-generation Spectacles, but they aren’t available to the general public yet. Instead, Snap is releasing them to a small number of AR impact developers at a time while the company continues to fine-tune the technology.
According to a Snap spokeswoman, this contract isn’t exclusive, which means WaveOptics will continue to sell waveguides to other firms when working on custom optical solutions with Snap. Nonetheless, it would give Snap a significant advantage in the emerging yet rapidly growing demand for augmented reality headsets. Google and Facebook, for example, are said to be developing waveguide technologies to control their AR frames. In 2018, Apple acquired Akonia for its long-rumored Apple Glasses, which Apple may release in 2022.
Snap CEO Evan Spiegel told CNBC on Friday that the firm has been working with WaveOptics on waveguides for smart glasses for “many years.”
He defined the components as “very sophisticated and complex.”
Snap Inc. has been on a bit of a buying binge recently, with WaveOptics becoming the company’s fourth and most significant purchase so far this year. As part of a broader foray into e-commerce, it paid $124 million in March for Fit Analytics, an apparel-sizing analytics company. Snap Inc. also acquired StreetCred in January and Pixel8Earth in April for their visualization software. StreetCred and Pixel8Earth will be used to build location-based services.
Snap believes that this new iteration of Spectacles can be a hit. That certainly wasn’t the case for the previous three. Snap’s first-generation Spectacles are said to have cost the corporation $40 million in unsold inventory, with “hundreds of thousands” of pairs sitting in warehouses collecting dust. Later models fared a little better nevertheless, they struggled to generate interest.
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