OTOH if it’s even mildly successful someone will clone it in app form within a week anyway, which will almost certainly crush hardware sales. (Why pay $99 for a gimmicky camera when a $1 app does basically the same thing? All my friends are on Instagram anyway.)
I say just get the app out there first and try to make up for the lower price per unit with volume. If it becomes truly popular and there’s demand for physical prints then rebadge and sell a commodity Bluetooth printer.