There's a bit of a feud going on between Facebook (META 0.20%) and Snap (SNAP -1.17%). After Snap CEO Evan Spiegel rebuffed Mark Zuckerberg's $3 billion offer for his company in 2013, Facebook started imitating Snapchat's features both in stand-alone apps and in its more established apps like Instagram. It also bought Msqrd about a year ago to take advantage of its Snapchat-style lenses that overlay graphics on users' faces.

Facebook finally found success with Instagram Stories -- a blatant copy of Snapchat Stories -- which quickly amassed hundreds of millions of daily users in a matter of months. It quickly spread the format to its other big apps -- Facebook, Messenger, and WhatsApp.

All of this led Spiegel's fiancee, supermodel Miranda Kerr, to ask, "Can they not be innovative? Do they have to steal all of my partner's ideas?"

But Mark Zuckerberg says Facebook is innovating. "I think we're a little bit late to the trend initially around making cameras the center of how sharing works. But I do think at this point, we're pretty much ahead in terms of the technology," he said on the company's first-quarter earnings call. Facebook's focus on the camera is bad news for Snap, a self-proclaimed camera company. Here's why.

Use case of Facebook's new camera effects: drawing on image.

Image source: Facebook.

"The best way to compete is by innovating"

Snap's S-1 filing with the SEC says its strategy is basically to be more innovative than its competitors. It practically admits it has no moat other than its ability to create more innovative products. "The best way to compete is by innovating to create the most engaging products," management writes. "That's because it's difficult to use distribution or cost as a competitive advantage -- new software is available to users immediately, and for free."

To be sure, Snap is full of creative minds -- including Spiegel himself -- that are excellent at generating new formats to share content like the original disappearing photo message function of Snapchat and Stories. The problem is that those innovations are quickly and easily copied.

Snap getting mad at Facebook for copying Stories would be like ESPN getting mad at Fox Sports for copying the one-hour sports highlight show everyone knows as SportsCenter. Or CNN getting mad at MSNBC for using the "octo-box" of pundits to cover election night. If it works, it's going to get copied.

And contrary to Snap's opinion that access to distribution can't be used as an advantage, Facebook is demonstrating that it most definitely can. Instagram Stories already has 200 million daily users, and WhatsApp Status -- the WhatsApp version of Stories -- has 175 million. Both are more than Snapchat's daily user total.

The technology that makes it all work...better

While Snap has been extremely innovative with its photo and video sharing formats, filters, and lenses, it's going to be difficult for it to compete with Facebook in terms of better technology. Facebook is a much bigger company producing billions in cash every quarter. Additionally, it has many more users and much more content to test new AI algorithms on to produce better augmented reality experiences and improve computer vision for recognizing objects in photos and videos.

Chief Technology Officer Mike Schroepfer talks about the tech behind the Camera Effects Platform.

Facebook's augmented reality/computer vision technology. Image source: Facebook.

Zuckerberg's claim that it's ahead in camera technology should scare Snap and its investors because Facebook isn't going to slow down its R&D. The Facebook founder plans to make the camera the center of Facebook's apps. He sees commercial viability of augmented reality beyond sponsored lenses like in Snapchat.

Moreover, Facebook has hundreds of independent developers that want to work with it. The company released a new tool for them to make their own filters and lenses in April. Importantly, Facebook has the scale to attract these developers to its platform.

So, Facebook will have thousands of different filter options for users to play around with, and it can use its AI expertise to surface the best ones for each user. That makes for a better experience since users are always discovering new things to do with Facebook's camera and aren't just seeing the same things over and over.

Facebook is taking what works on Snapchat and making it better with its own technology. That's a problem for Snapchat because augmented reality, artificial intelligence, and computer vision technology is a lot harder to copy than just displaying content in a new format. That's the type of innovation that provides a real competitive advantage.