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Return of Polaroid? App takes on Instagram, Snapchat with hardware inspired by iconic brand

Polaroid Swing, an app that captures one-second snap shots, is set to launch a hardware product that promises to recapture the "specialness" of the traditional camera.

"We are very much in the space between the physical world and the digital world," Tommy Stadlen, co-founder of Polaroid Swing, told CNBC on Thursday.

"So later this year we will be bringing out a hardware product, augmented reality hardware product, which allows you to reach into physical photos and bringing them to life, so that is the future for us and I think that's where Snap is going as well," Stadlen added.

Stadlen did not reveal what form the new hardware would take as he wanted to keep the product under wraps. He suggested that it would be a "Polaroid-inspired product".

The investment in hardware products isn't new and it is an attempt by apps to make revenue. Snapchat, for example, released last year video recording sunglasses called Spectacles.

"Hardware launches can provide a valuable new revenue stream if executed correctly and for a company like Snap we also saw that its initial limited hardware launch had marketing and brand benefits beyond just revenues. The rollout of devices to new markets became a news story in itself," Jack Kent, director of operators and mobile media at IHS Markit, told CNBC via email.

But Gene Munster, a venture capitalist at Loup Ventures, found that millennials believe the recording glasses are weird, although they enjoy the app nonetheless.

"The problem we had in the past was wearables they were a bit nerdy, they weren't for everyone on the street," Stadlen from Polaroid Swing said.

"What we've tried to focus on is how do you bring the kind of specialness of the internet into a core product, something which is aspirational, people actually want to see, no wires, no kind of weird glasses, it has to feel natural but with technology embedded in a very seamless way," he added.

However, Kent from IHS Markit, warned: "The hardware market is very competitive with high price sensitivity putting pressure on margins for many device makers."

"App-based companies looking to enter the devices market should look at the wider platform strategies of their competitors, which often have much bigger audiences and deeper pockets. Some companies can use hardware to drive an alternative business model around content, advertising and services – others may look to make money on hardware which can subsidize a content business. Companies must understand the wider strategies of their competitors if they are to succeed," he added.

The foundation of Polaroid Swing has been "the incredibly iconic brand" that polaroid is. Swing is licensing the brand from Polaroid and this app is not made by Polaroid itself.

There is a trend towards bringing back iconic brands with Nokia announcing last month that it is re-launching its old, yet successful 3310 model.

- CNBC's Arjun Kharpal contributed to this report.