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Snapchat Rolls Out 3D Bitmoji World Lenses, Upgrades App

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Per a Business Insider report, Snap Inc.’s (SNAP - Free Report) messaging application Snapchat is rolling out 3D Bitmoji, which users can access through the rear facing Snapchat camera and superimpose it on their posts.

Bitstrips, the developer of Bitmoji, was reportedly acquired by the company in March 2016 for about $100 million. However, the company is yet to make any monetary gains from it.

Snap has been experiencing a slowdown in its user base and revenue growth rates. Notably, shares of Snap have lost 39.1% of its value since its listing date of Mar 2, 2017 against 8.7% growth of its industry.

App Updates

Snap is striving hard to boost its user base and win over investors’ confidence by continuous addition of new features. Further, increase in the number of advertisers on the platform will enable the company to earn more revenues.

Per eMarketer’s latest report, this year, Snapchat’s domestic user base is likely to increase 25.8% to $79.2 million driven by a 19.2% increase in users in the 18 to 24 age group.

Snapchat’s acquisition of Looksery helped it bring the Lenses feature to its platform in 2015. Moreover, Snap, in a bid to expand in augmented reality, introduced “World Lenses” in April 2017. The feature allows users to superimpose special effects on the photos or videos. We believe with the latest addition of this animated feature, Snapchat will be able to make its platform more attractive to users.

In July, Snap released an update to its Snapchat app with a new linking feature called Paperclip, which allows users to add web links to their snaps.

Snapchat also introduced other new "creative tools” to upgrade snaps — backdrops for adding illustrated backgrounds to photos and voice filters for altering voice without an animated lens. Further, the voice filters allow users to modify the sound of their voice in various ways.

Growing Competition

Although Snapchat’s latest features such as Stories in Search, 3D World Lens, Custom Stories, Snap Maps and Geofilters have helped it boost engagement and user growth in the last quarter, the company faces serious competition from Facebook (FB - Free Report) . Facebook has started to mimic Snapchat features on its platforms and succeeded in making them more popular than Snapchat.

Interestingly, analysts have related the slowdown in Snapchat’s user growth to the popularity of Facebook’s Instagram Stories, a blatant rip-off of the former’s hallmark feature.

At the latest iPhone X event, Apple (AAPL - Free Report) mentioned that it is working with Snapchat for creating filters. However, Apple also spoke about its intention to strengthen augmented technology efforts in its iMessage application. Therefore, it remains to be seen whether these factors help drive growth for Snapchat or further intensify competition.

Zacks Rank and a Key Pick

Snap has a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is Micron Technology (MU - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Micron is currently projected to be 10%.

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