In its recent earnings report, Snapchat’s parent company Snap Inc. revealed it is “currently redesigning our application to make it easier to use.” After raking $207 million in revenue in Q3, the company revealed that it missed investors’ expectations regarding user growth and expansion – reportedly making a loss of $443 million.
However, progress had been made regarding its ad business, user growth and activity has been stagnant in recent years. The app hosts around 178 million daily active users but has been struggling to compete in a market where Instagram and WhatsApp, both of which also provide camera and messaging services, host 300 million users, respectively.
In response to plummeting sales, short-term efforts to boost revenue resulted in losses of up to $40 million. Snap spectacles failed to make a market impact, leaving behind thousands of unsold pairs, and Snap Maps was met critically with concerns over safety and privacy. With further plans to actually pay top users, the future of Snapchat doesn’t seem so bright.
In an address to investors, Snap Inc. CEO Evan Spiegel reported that the company plans to redesign the app to boost user interface and growth in sales, but not without repercussions. Spiegel warned, “there is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial longterm benefits to our business.”
Although no official designs have been released yet, we still have hope for the recent Snapchat and Netflix collaboration.