Snap Considers Spinning Off AR Glasses Unit Amid Strategic Challenges

Snap Inc. is exploring a spin-off of its augmented reality glasses division, Spectacles, as the social media giant seeks outside funding to compete with Meta's dominance in AR hardware. CEO Evan Spiegel has invested $3 billion in the project, positioning it as central to Snap's future despite lackluster consumer adoption.

The potential restructuring comes as Snap faces generational headwinds. Engagement among Gen Alpha users has declined, attributed to stricter school phone policies and lower smartphone penetration in younger demographics. Executive departures and a 92% stock price collapse since 2021 compound the challenges.

Unlike rivals Meta and YouTube which continue to expand their AR ecosystems, Snap's hardware ambitions remain constrained by its reliance on Snapchat's Core features. The spectacles' deep integration with the app creates technical hurdles for any potential separation.