It's easy to forget that the social media company started off the year as the darling of Silicon Valley and in March held the biggest IPO since Alibaba Group Holding Ltd. (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report , raising an impressive $3.4 billion. Snap's dazzling IPO quickly lost its luster, however, as investors grew increasingly concerned about its intense rivalry with Facebook Inc. (FB) - Get Facebook, Inc. Class A Report and the company reported one gloomy earnings report after another. As 2017 comes to a close, Snap now trades at half the value of its peak price, and onlookers are eager to see if the Snapchat app's big redesign will pay off.
Here are some predictions for what 2018 may have in store for Snapchat:
1. Snap introduces live video features.
Snap could end up taking a page from Facebook's Instagram by introducing a live video feature to the app. In June, Instagram started allowing users to add live videos to their Stories, which can be replayed for up to 24 hours before they're deleted. Snapchat, which used to cling to its ephemeral nature, has shifted its strategy in the past year by adding things such as an Infinity feature that lets you record Snaps without a time limit, Snaps with looping video and a Memories tool that lets users upload photos from their phone's camera roll to Stories. In the past, users could only record Snaps for up to 10 seconds.
Creating a live video option could serve as another way for users to spend more time on the app each day and less time on competing services such as Instagram or Twitter Inc. (TWTR) - Get Twitter, Inc. Report . It would also put Snap on par with Twitter and Facebook, which both offer live video features.
Snap has also been trying to establish itself as a news source via its quickly growing Discover platform, which features content from professional publishers, as well as Snap Maps. More and more professional outlets have signed on to create weekly shows for Snap, such as 'Stay Tuned,' a news show from Comcast Corp.'s (CMCSA) - Get Comcast Corporation Class A Report NBCUniversal, which also invested $500 million in Snap during its IPO. A live feature would let news outlets produce less scripted content and potentially interact with users on the platform.
2. Augmented reality takes center stage.
Snap may have stumbled in a lot of ways since its IPO, but few can dispute that it has made strides with its augmented reality (AR) technology.
Sure, Snap's $130 camera sunglasses, Spectacles, ended up being something of a disaster, but that shouldn't overshadow the fact that the company has played a huge role in popularizing AR. In 2017, Snap unveiled a ton of AR-powered lenses and geofilters, including some that let users change the color of the sky in their photos, superimpose artist Jeff Koons' balloon dogs on images of their homes and more.
AR received perhaps the biggest endorsement it could get when Apple Inc. (AAPL) - Get Apple Inc. (AAPL) Report introduced the iPhone X, which has a front-facing camera packed with 3-D sensors that enable AR features. At its September event, Apple even mentioned how the camera would improve Snap's AR lenses.
Snap is believed to be planning a second generation of Spectacles that could use AR to detect a user's location and beam relevant content onto a live video feed. It seems plausible that this feature might resemble something along the lines of Alphabet Inc.'s
(GOOGL) - Get Alphabet Inc. Class A Report Google Lens, which uses artificial intelligence to analyze elements of a user's photo. While it's unclear if Snap will release another version of Spectacles, it could launch location-specific AR features in its Snap Maps feature.
3. More top executives exit the company.
This one seems like a bit of a no-brainer. Over the last several months, a stream of high-paid executives have left Snap, including head of engineering Tim Sehn, vice president of human resources Robyn Thomas, vice president of security Martin Lev and general counsel Chris Handman. It wouldn't be all that surprising to see more executives part ways in 2018.
The exits come as Snapchat is in the midst of a major redesign that separates personal messages from professional news content and is meant to improve many of the app's most confusing features. Snap has also laid off employees from its recruiting and hardware divisions and plans to slow hiring in 2018. To many, it appears that Snap is in the process of redefining Snapchat as it looks to remain relevant in a winner-take-all environment dominated by Facebook.
At the same time, Snap made some key executive appointments recently that indicate where it may be staffing up. The company hired Rahul Chopra to head a new initiative called "Stories Everywhere" which will let people link to user-generated Stories outside the Snapchat app, Cheddar reported on Wednesday. It also reshuffled some existing execs to lead its content development, strategy and Discover programming.
4. Snap bows even more to Wall Street's demands.
It took three disappointing earnings reports, frustration from
and a rapidly depreciating stock price for Snap CEO Evan Spiegel to begin taking Wall Street's concerns seriously. Spiegel
that he may have underestimated the need for clear communication with public market investors. It was unsurprising, then, when Spiegel took on a markedly different tone with Wall Street during the company's latest earnings call, offering more detailed answers during the Q&A session and, for the first time, including a prepared statement in the company's earnings release.
It doesn't seem likely that Snap will ever meet one of Wall Street's biggest demands: Issuing forward-looking guidance. That said, it appears that Spiegel and the rest of the executive team are treating 2017 as a rude awakening that can be used to improve Snap's relationship with Wall Street in 2018.
5. Snap goes global.
Snap's other eureka moment this year came in the form of doubling down on global expansion. It seems likely that Snap will further this effort in 2018 as it looks to break into new markets such as India, South America and perhaps even China at some point.
The company has long held the view that it would only focus on major growth markets such as the U.S., Canada and some parts of Europe. Some investors and industry watchers warned against this strategy, given concerns that those markets might already be saturated, causing Snap's user growth to plateau.
Snap has recently shifted its view on international markets, however. In the company's most recent earnings report, Snap said that it would be rebuilding its Android app completely, which should help it tap into developing markets where WiFi connections have limited download speeds, such as India, Southeast Asia and South America.
Interestingly, Snap may also get into China before Facebook does. Both Snapchat and Facebook are currently blocked in China, but Snap could use its investment from Chinese internet giant Tencent Holdings Ltd. to make inroads there. Snap could partner with Tencent to be added to its hugely popular WeChat messaging app, potentially opening up a massive market of new users.
For its part, Snap recently opened a research and development office in Shenzen, China and is looking for an international strategy manager, presumably to court Chinese brands who want to advertise outside of China.
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