Morning Report: Augmented reality is heating up with the launch of ARKit from Apple. But Snap still keeps it homegrown—potentially to its demise.
Augmented reality has taken center stage across major public firms. Both Facebook and Apple now offer AR developer toolkits, with Apple launching ARKit yesterday at WWDC.
But it leaves Snap, which has not shown overt interest in working with developers, sandwiched between two giants.
This is a problem, as augmented reality experiences within Snap are not only integral to its growth and mainstream appeal, it is also an area where Snap is banking on advertisers to embrace. As ReCode reported in May 2017:
Snapchat is rolling out a new augmented reality ad unit that lets marketers pay so that users can see images or words overlaid on the world around them through their phone’s camera.
While Snap currently holds the edge on these experiences in terms of quality, its lead is not a given as Facebook and Apple roll out their own solutions to massive userbases. It’s also not clear Snap can maintain creativity and innovation in AR at scale while third-party creators adopt more welcoming, richer platforms in Facebook and Apple.
Perhaps most importantly, unlike Snap, it’s quite unlikely that Facebook or Apple will have to worry about monetizing these experiences in hopes of appeasing investors—allowing each to focus on competing with Snap’s tech.
And with increased competition in AR experiences, it’s open to debate on how long Snap can command premium advertiser rates based on its supposed AR quality. Already, the company has missed revenue estimates, and JP Morgan cut its share price target from $20 to $18 dollars yesterday, partly due to fears in “the company’s ability to scale its advertising business.”
Whether Snap’s lone wolf attitude will help or hurt its AR ambitions in light of new entrants remains to be seen.
From the Crunchbase Daily:
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