By almost all accounts, Snap (NYSE:SNAP) is losing the race to Instagram and WhatsApp. The Facebook (NASDAQ:FB) platforms are doing Snapchat better than Snap itself.

In its dreadful third-quarter earnings report, Snap reported revenue growth well below analyst expectations, losses that were much wider than a year ago, and dramatically slowing user growth. The vanishing-message app said it reached 178 million daily active users, some 16% more than a year ago. That's substantially below the 63% rate of growth it achieved last year and has been rapidly and steadily declining for years.

Snap logo

Image source: Snap.

Worse, Facebook's Instagram and WhatsApp passed the 250 million active user threshold this past summer just for the Stories feature, the innovative tool Snap developed that allows users to post videos or photos that disappear after 24 hours. In fact, Instagram has over a half-billion daily active users and WhatsApp has over 1 billion.

With those kinds of numbers, it certainly looks as if Snap is in decline and will be overwhelmed by its rivals. But appearances may not be what they seem. It turns out teens are still really tuned into Snapchat much more so than they're into either Instagram or Facebook.

Resonating still with its core user

Piper Jaffray recently released the fall edition of its "Taking Stock of Teens" survey, a twice-annual survey of 6,100 teens with an average age of 16 that asks them about their social media habits. It found that more than any other social-media platform, Snap was the one they preferred.

According to the survey, 47% of Gen Z teens said Snapchat was their favorite platform -- a 1,200-basis-point increase from last year's fall survey -- compared with 24% that rated Instagram their preferred social-media outlet. Only 9% said Facebook ranked as No. 1.

That bodes well for the future of Snap if it can get its act together. Currently, however, that's looking like a big "if."

Snap Spectacles

Image source: Snap.

An identity crisis

Its first mistake may have been branding itself as a camera company, since all it really is, is an app that lets users connect with one another. It had grandiose ideas for becoming something more, but its attempt to make pricey glasses called Spectacles has apparently fallen flat as has its pursuit of a Chinese drone company. (It did buy a different drone manufacturer earlier, though)

By going off on a tangent the way it did, it took its eyes off the people who are actually using the app. A $300 pair of eyeglasses would seem to be more for an adult audience than the teens with which Snap is popular, particularly since CEO Evan Spiegel has admitted his app isn't intuitively easy for older folks to use.

And in another sign he was thinking about adults and not teens, Snap's recent use of an alternative-reality lens to highlight the work of artist Jeff Koons was a wasted effort.

At various locations around the world, such as Central Park in Manhattan and the Eiffel Tower, as users approached the landmark with their special Koons Lens activated, they could see one of the artist's famous stainless-steel sculptures appear. While that follows after successful promotions by Pokemon Go and Disney's (NYSE:DIS) Star Wars movie release, it was a bit idiosyncratic, including the choice of artist, as it could only appeal to jet-setting people able to travel the globe.

Snapping to attention

Despite these wayward approaches to attracting attention, it's possible Snap may be able to change. Spiegel recently said he was committed to making the platform easier to use, and an overhaul of the app is expected to be released next month. If he can bring in more adults to Snapchat while keeping the app's appeal with teens, he might be able to reverse the declining rates of growth that's being seen.

Of course, there's risk in changing the native feel of Snap that may alienate teens, but it's clear the social-media platform needs to do something drastic and dramatic if it wants to reverse its decline and eventual irrelevance.

That so many teens still enjoy using Snapchat, though, holds out the slimmest of hopes it may succeed.