AP Photo/Jae C. Hong
Snap CEO Evan Spiegel.
- Snap's stock price cratered after its daily users declined for the third consecutive quarter.
- CEO Evan Spiegel blamed the drop on the company's Android app, which users say is laggy and has poor camera quality.
- Snap is rebuilding its Android app from the ground up in the hope of attracting more users in emerging economies, where Android is much more popular than the iPhone.
- The company has known for years that its Android app is flawed, but chose to prioritise its iPhone app and users.
Snap's stock price closed 12% down after the company revealed the Snapchat app had lost users for a third consecutive quarter.
The company was down to 186 million daily active users in the three months to September 30. That's up from the same period last year, but a fall from 188 million daily users in the three months to June.
Chief executive Evan Spiegel said there was one culprit for the user decline: Snapchat's terrible Android app. Here's what he told analysts during the firm's third-quarter earnings call, according to a SeekingAlpha transcript:
"There are billions of people worldwide who do not yet use Snapchat. Continuing to improve our user experience and creating awareness about our value proposition are key drivers in growing our community. This quarter, our daily active users grew 5% over the prior year and were down 1% sequentially. The decline was primarily among Android users.
Snap is fixing the problem, he added:
"We have been developing a completely new version of our Android application to be lightweight, modular and performance. The Android community represents a global growth opportunity for us and we're making good progress, testing the application in select markets. We look forward to rolling it out when it's ready."
And he sees Android as a specific route into young users in "developing markets."
Snap has known its Android app is terrible for about three years
It isn't at all clear that rolling out a new Android app this late in the day will fix the cratering user base, though Snap is certainly pegging its hopes on it. The firm has known for almost three years that its Android users are being shortchanged on the quality of its app.
A Reddit thread posted in January 2016 with the title: "Snapchat on Android, how is this such a bad experience?" has hundreds of comments from angry users complaining about frequent app crashes and poor camera quality.
Another angry user complained on Reddit as recently as two months ago: "I use Snapchat more than any other app, which is unfortunate since it runs worse than literal dog shit. The app lags, crashes and freezes at least 10 times per day for me. The camera quality is grainy and low resolution..."
The people complaining have a point. Here's how a picture taken on Snapchat for Android last year compared with one from the iPhone app:
Emmanuel Ocbazghi/Business Insider
You can see the image on the left is blurrier and grainier than the photo on the right.
It isn't all Snap's fault. Developers conventionally favour the iPhone because, by and large, most users are on one operating system. It's much easier to develop an app for a consistent experience. In terms of Android, there are lots of different phone brands, all running different versions of the software. Some people may be on the most up-to-date software, others may be running on a version of the OS released years ago.
And yet, could Snap have done more and earlier?
Android accounts for 85% of the mobile market, while the iPhone only accounts for 15%. That 15% represents advanced economies like the US and the UK.
Snap has focused its initial efforts on advanced economies because those users have more advertising value. Neglecting Android, a proxy for emerging economies, looks a little like ill-advised snobbery at this stage.
You can read more about the company's third-quarter earnings here.
Get the latest Snap stock price here.