Snap Inc. Announces Plans For A Snapchat Redesign After Disappointing Earnings Report

Snap Inc. has announced that it will be redesigning the Snapchat app for Android in an effort to increase its user base. The announcement came after Snap posted its third quarter earnings report, which showed weak revenue and user growth.

Snap’s third quarter earnings continue the company’s losing streak as Snapchat was only able to add 4.5 million users during Q3 2017. The company earned $207.9 million in revenue with a loss of $0.14 per share. This misses the company’s expectation of $237 million in revenue and a loss of $0.15 per share, according to TechCrunch.

During Q3 2017, Snapchat grew its user base by only 2.9 percent, which is up from 173 million to 178 million. However, analysts were expecting Snapchat’s user base to grow by 180 million users during the quarter. The 2.9 percent growth rate is the lowest ever since the 3.2 percent growth from Q4 2016. The disappointing earnings result for the quarter prompted Snap’s share price to drop by more than 16 percent, bringing the share price down to around $12.65.

In light of this, Snap CEO Evan Spiegel sent a note to investors and revealed that Snapchat will be receiving an overall redesign that will make the app easier to use. This could help boost Snapchat’s number of new users which is ideal for the company in the long term.

“One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback. As a result, we are currently redesigning our application to make it easier to use,” Spiegel said.

“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.”

There’s no information what Snapchat’s redesign will look like, but Spiegel did say that Snap has been looking into mobile content feeds of other social media services like Twitter and Facebook’s News Feed. In particular, the Snap CEO mentioned “personalized content service” and leveraging the benefits of machine learning. This may be hinting at the possibility that Snapchat might adopt an algorithmic feed.

“We are developing a new solution that provides each of our 178 million daily active users with their own Stories experience, leveraging the tremendous benefits of machine learning without compromising the editorial integrity of the Stories platform that we have worked so hard to build,” Spiegel said.

An algorithmic feed would make Snapchat easier to use and would allow people to easily and quickly browse through snaps they actually want to see. However, that kind of radical change could also mean that it could compromise Snapchat’s uniqueness.

Most importantly, the Android version of the app will receive a major redesign, which Spiegel says will be built “from the ground up,” according to Android Authority. Spiegel also said that the new Snapchat app for Android will be a huge focus over the coming year for its development team. This new version of the Snapchat Android app doesn’t have a release date yet, but it will launch in select markets first before it’s released more widely.