Snapchat's next tech product could be selfie drone
Snap has acquired drone company Zero Zero Robotics, in a deal reputedly worth between $150m and $200m, according to insider sources. The drones, which currently retail for $499.95 online in the Apple store, not only offer Snap a new revenue stream but a point of sale option with Apple. Sales of Spectacles, Snap's previous hardware acquisition, made up the majority of its $8.3m Q2 2017 revenue. The acquisition could also point to Snap moving into the camera industry, a market not explored by rivals Instagram and Facebook.

Snap Inc. has a hardware division, but the only tech product you can buy is a pair of sunglasses. That could soon change.

Snapchat's parent company has bought Zero Zero Robotics, which currently sells a selfie-taking drone called Hover Camera at Apple retail stores and online, according to two sources familiar with the situation and multiple communications about the acquisition observed by Mashable.

A separate source with direct knowledge of the matter confirmed the companies are in talks but denied that the deal has been finalized.

The Information(opens in a new tab) reported(opens in a new tab) in August the two companies were in talks regarding an acquisition. Mashable has learned the deal officially closed this summer, according to two sources with knowledge of the deal, and that Snap Inc. has not publicized it and has not allowed the team behind Zero Zero Robotics to speak out about it.

Snap declined to comment. Zero Zero Robotics did not immediately respond to a request for comment.

This secrecy is typical of Snap, a company that has kept the majority of its other acquisitions quiet until they were outed by the press or until Snap released a feature that was developed, in part, through that acquisition (for example Snap Maps).

The terms of the deal were not confirmed, but Techcrunch(opens in a new tab) reported(opens in a new tab) that the deal was for between $150 million and $200 million.

Snap Inc. owning Zero Zero Robotics could mean a new feature for Snapchat. The experience could be quite like Spectacles where users can take 10-second videos and upload them to their account. Hover Cameras can take selfies or other aerial videos, which users could later share on Snapchat.

The deal also points to Snapchat's evolution as a "camera company" beyond smartphones, a step that could help the company differentiate itself from competitors like Facebook and Instagram.

"Snap is unpredictable. Nobody really knows what they do."

Differentiations from Facebook are something that analysts and investors are begging for from Snap Inc. They've watched the stock fall from $27 per share to below $14 as Facebook releases similar products, the most similar being "Instagram Stories" and the latest being Facebook Watch, a competitor to Snapchat Discover. All of those features compete for digital advertising dollars.

"Snap is unpredictable. Nobody really knows what they do. They have this app, but they call themselves a camera company," said James Brumley, analyst at InvestorPlace.com(opens in a new tab). "For now, they are not a camera company. They are in ad sales."

For now, hardware is only a small fraction of Snap's business. Spectacles comprised the majority of Snap's $8.3 million in "other" revenue reported in May for the first quarter of 2017. Snap generated $149.9 million overall for the quarter.

"[Spectacles'] $8 million doesn’t really compare to [Snap's] ad revenue. It doesn’t hurt, but if they are going to become a hardware company and start selling cameras, they need to do a lot more it," Brumley said.

With Hover, Snap is bringing in another revenue source beyond what it makes from digital ads within Snapchat and from selling Spectacles. Hover sells for $499.95 online on Apple.com and in Apple retail stores. If it keeps the Apple partnership, it also gives Snap another point of sale option.

Some of Snap Inc.'s most notable features have been constructed via acquisitions and then integrated into its core product. We compiled some of Snap's acquisitions, matched with their similar products:

Vergence Labs → Spectacles

Bitstrips → Bitmoji in Snapchat

Vurb → Search bar

Placed → Location tracking in ads

Zenly → Snap Maps

Cimagine → Augmented reality tech

Flite → Ad tech

Seene / Obvious Engineering → 3D selfies

Looksery → Lenses

Scan.me → QR scanning

AddLive → video chatting

Snap also recently acquired the team behind Strong.codes to support cybersecurity efforts.

Zero Zero Robotics would not be Snap's first acquisition of a drone company. Snap acquired Ctrl Me Robotics, a Los Angeles-based drone manufacturer, for under $1 million, according to (opens in a new tab)BuzzFeed(opens in a new tab). Ctrl Me also worked with movie studios to produce drone footage.