Snap (NYSE:SNAP) CEO Evan Spiegel told The Verge earlier this month that the company should’ve made more of its latest gizmo, the Pixy drone, as demand seems to be outpacing supply. However, this heavy amount of demand could be a catalyst for SNAP stock in the long run.
The Pixy drone allows users to maneuver the drone to particular spots to take photos or videos that are then sent directly to the Snapchat app. Users can subsequently edit their files with various Snap effects and filters. Hence, it appears that Pixy is offering pertinent options to users.
Overall, Snap’s automated selfie drone is gaining healthy traction amongst customers. And despite the limited release, its demand has been encouraging.
However, reports suggest that the company is extending estimates for Pixy shipments. Customers were previously told to wait “upwards of three months.” Now, Snap says it could take “up to four months.”
Demand numbers are unclear, though, and Snap hasn’t disclosed how many units were in production. Therefore, it’s tough to say whether Pixy is selling well. A likely scenario could be that it didn’t have that many units, to begin with.
Of course, this could relate to how Snap previously lost $40 million from the overproduction of its Spectacles video-recording sunglasses. However, Spiegel states that the company underestimated the interest in Pixy, which led to the supply shortage.
Furthermore, Snap operates an incredible business that continues to perform at a staggering pace. In turn, Pixy drones are a welcome addition to its business and could add millions in revenue over the next few years. In fact, the drone camera market is estimated to grow at a breathtaking 29.9% from 2019 to 2027.
Therefore, Snap could be looking at a massive money-spinner on its hands. And that could mean good things for SNAP stock long term.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.