On Apple's latest earnings call, the company from Cupertino announces another record-breaking quarter. It now has $216 billion in the bank, after turning over $75 billion in revenue. Incredibly, it created more profit in a single quarter than any company ever has. Naturally, on the back of this news, Apple stock tanked.
Such is the bizarre world of the technology sector, where insatiable tech pundits, obscene valuations from venture capitalists, and the pressure of Wall Street combine to create a bubble where the product you're selling is never as important as your user growth.
"Let's not mince words here, the core product of Snapchat is awful."
Growth is all that matters. Running at a loss is fine — hell, running at a loss is a virtue — as long as user numbers point skyward. Apple is the most profitable company in history, but that's not good enough because there's seemingly no one left on the planet for Apple to sell to, so no expectation of growth. And that brings me to Snapchat.
Snapchat burst onto the social market scene in 2012, and quickly grabbed headlines as the "sexting app for teens". Of course, Snapchat was much more than that, but that didn't matter. Headlines spawned growth, growth was noticed by Wall Street and venture capitalists, and investment in the platform spawned further headlines. Snapchat is the perfect self-perpetuating hype machine.
I never bought into the moral outrage that Snapchat existed for sexting; I receive Snaps from people every day, but none are sending me anything I'd be embarrassed to open in public. While the press were obsessed with the sexting angle, few seemed to notice the core benefit of Snapchat is privacy. The problem for Snapchat is it's not the only private network in town.
In an era of over-sharing led by Facebook, Twitter and Instagram, private social networks are the natural backlash. But Snapchat doesn't own the privacy market. WhatsApp (now owned by Facebook) counts 950 million active users on its private messaging service, while Facebook Messenger enjoys 800 million active users. I feel Snapchat will one day regret turning down a $3 billion Facebook acquisition. .
But most pundits seem convinced Snapchat's rise will continue. The more I read that Snapchat is the new Instagram, or that it's destined to overtake Twitter by the end of the year, the more I can't help but feel these pundits have lost their minds.
Sure, Snapchat is growing at an exceptional rate, but growth isn't everything. It may have the millennial market sewn up, but that market is fleeting, and happy to swap to the next cool platform. And Facebook Messenger is a compelling platform for pointless, ephemeral chat. All the people I know who were once heavy Snapchat users have already moved on, and I think there's a simple explanation why.
Let's not mince words here, the core product of Snapchat is awful. Snapchat has always had a messy user interface, which I'm sure it would consider to be "playful". The disappearing photo at the core of the experience was an interesting gimmick, but like most gimmicks, it has a use-by date.
Snapchat's revenue comes through Discover, a platform for brands to advertise to the 100 million strong Snapchat faithful. If App Store reviews are anything to go by, Snapchat's users hate the Discover tab. Well, of course they do. Brands love the idea of connecting with people wherever they may be, very few people return the thought.
Again, there's no denying Snapchat is huge right now. But like MySpace before it, if feels trapped by its own design and the limitations of the platform. I predict the people who love it today will look back on it tomorrow and cringe. Snapchat is destined to be as ephemeral as the snaps at the centre of the platform. It'll take longer to happen, but eventually Snapchat will fade away.
Source: SMH
