The social media and augmented reality leader, Snap Inc, has enjoyed an exceptional 2021 as the company ramps up its AR deployment. However, as the augmented reality market continues to hot up with competitors emerging with new hardware and software alike, now’s the time for Snap to show its pedigree for innovation.
As a result of its growth this year, the Santa Monica-based company has earned itself a spot on the IBD Leaderboard as well as the IBD 50 list of top growth stocks.
Snap Inc, which owns visual social media network Snapchat, is now looking to capitalize on market optimism and cement itself as a market leader for AR.
As we can see from Snap’s price performance, the stock has climbed some 51.46% on its opening price at the beginning of the year, with the company experiencing a series of pumps throughout the summer.
“The real and virtual worlds are expected to merge over the next few decades. The metaverse is a term used to describe this phenomenon,” explained Maxim Manturov, head of investment research at Freedom Finance Europe. “Snap is likely to be one of the most successful companies as a result of this trend’s development. The company is making significant investments in Snap Cameras and Lenses, which are the primary building blocks for AR features. The platform’s development of AR features is expected to significantly contribute to expanding use cases and long-term growth.”
As the data above shows, the augmented reality market in the US is set to grow exponentially over the course of the decade, with head-mounted displays and AR eyewear taking the lion’s share of the market as the years go on.
Snap’s made a series of inroads into the AR eyewear market, but with a range of resourceful industry giants all in line to release their own augmented hardware in the coming years, can Snap hold its position as a market leader?
Fending off Competitors
September saw the release of Facebook’s long-awaited smart glasses. Created in collaboration with Ray-Ban, the glasses can take pictures, record videos and stream music. Although the glasses currently don’t currently feature AR functionality, Facebook has confirmed that it plans to utilize augmented reality in future releases.
Soon, other major players like Apple, Google and Niantic will also release their latest models – which are expected to arrive in stores over the course of the coming months and years.
Snap also had to face up to Xiaomi’s AR wearable concept, which was also unveiled recently. The concept features push notifications, alerts, live call details, interactive map overlays and a built-in speaker and microphone to make and receive calls.
Although this congested market may seem tricky for Snap to manoeuvre in, the company’s $116 billion market cap – weighing in at a fraction of its major competitors – indicates that the stock has vast room for growth should its own AR glasses capture the imagination of consumers.
Fortunately, the augmented functionality of Snapchat can provide a significant leg up in integrating brand new hardware into what’s already become a vibrant AR ecosystem.
Harnessing Snapchat’s AR Pedigree
Snap’s social media network, Snapchat, has been a pioneer in the augmented reality landscape for some time now, and boasts many advantages that can help the company to outperform their sizeable competitors.
Unlike other social or shopping apps, Snapchat has turned the use of an integrated camera into a central part of the user experience of the app. It’s the first thing people see when opening the app – giving Snap the ability to serve users AR experiences at a far more comprehensive rate than their competitors.
Snap also has plenty of pedigree for AR innovation. The company pioneered the augmented Lenses function that both Instagram and TikTok soon adopted, for instance. Lenses soon became one of the more popular features of the platform – with Snap estimating that by 2017 one-in-three daily users engaged with Lenses.
Perhaps most significantly, because Snapchat users are already accustomed to augmented reality, the process of getting them to adopt newer features like AR shopping is likely to be easier than other social media AR integrations. With higher levels of familiarity with Lenses, Snap has little need for new features to incorporate into its AR eCommerce offering.
For example, Snap’s recent AR collaboration with Nike didn’t require the company to create any new features to support the campaign – it simply added a ‘buy’ button to a Nike AR Lens. Subsequently, its shoes sold out in 23 minutes. Such success stories are likely to become more prevalent with Snap’s Screenshop integration – which is set to be built into the platform’s camera feature.
Snapchat’s marketing strategy is also streets ahead of its rivals. Recently, to mark the International Week of the Deaf, Snapchat introduced custom stickers and three new AR Lenses to encourage users to fingerspell. The new features were designed via feedback from deaf users and hard-of-hearing employees at the company.
Snap may be braced for the emergence of some powerful rivals in the augmented reality landscape over the next few months and years, but Snapchat stands as an ace up the company’s sleeve in terms of integrating AR hardware with fully functional existing platforms. With a company that’s been proactively adapting its social media channel for a future immersed in AR, Snap is certainly an underrated force in the augmented reality landscape.