Snap (SNAP 1.64%) may not be as popular as some other social media networks, but it has carved out a nice business, especially in augmented reality. In this video clip from "The Virtual Opportunities Show" on Motley Fool Live, recorded on March 22, Fool.com contributor Travis Hoium discusses the company's AR plans and its prominent role in the metaverse.
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Travis Hoium: Yes, if you are not familiar with Snap, Snap is typically considered a social network, primarily used by younger people. It is not as widely used as something like Facebook [now part of Meta Platforms (META 0.29%)] or specifically around the world. But what has been really interesting about them is that the fact that they are used by younger people is that they are typically the early adopters of the technology that Snap has been using.
When we think about the metaverse, we think about AR and VR who are leaders in that space, the company that doesn't often come up is Snap. But when you think about augmented reality, specifically, those Snap filters that you've seen, like you can look at your camera and turn your face into a pig or something like that, that's augmented reality.
Snap has backed its way into a really interesting position in the metaverse because they are building out this augmented reality. I just wanted to share a couple of things. One, you may not realize that Snap has been an absolute growth machine over the last five years. What they've done from their business perspective, they've really figured out how to monetize the customers that they have and the advertising business that they have.
Not profitable yet, so I'll just pull up they are losing money, and their stock has done well, it did well until everything fell apart during the pandemic. But let's look a little bit about their products. If you're not familiar with Spectacles, I don't know if you guys tried Spectacles or seen these, this is their AR glasses. I believe this is the third generation of the glasses that they have made.
These are not overlaying augmented reality on your view of the glasses itself. There's actually a couple of cameras in there and then some microphones, so you're actually capturing the world around you in augmented reality. Then that could turn that into a Snap, so in the app that will have, you can put basically filters on top of it. So, this is somebody just like looking around space and being able to add these digital images on top of it.
Now, what's interesting here from a long-term perspective is that to create all of this you have to have the tech behind the scenes. Developers have to be able to build on top of something like Camera Kit, like Lens Studio. This is where if you want to create an AR app, so basically plugging into one the tech that, let's use Apple as an example as smartphone, Apple (AAPL 0.73%) has in the iPhone and then that Snap is leveraging themselves the AR kit or Lens Studio is going to be one of the ways to do that.
Snap is then creating their own devices, so they're ridding themselves of their reliance on Apple from a hardware standpoint. Here's some other interesting things that you can do with this. Once you start diving down this rabbit hole of what you can do with AR it becomes really amazing. We aren't there yet, if you will, it's not at the point where you go like, this is going to be part of everything that I do every day for the future. But we are at the point where you can start to see how this could be really compelling.
If we're all wearing AR glasses around and you walk into a restaurant and instead of a bunch of fancy furniture, you just have digital things around, so it's like digital decorations or we're all investors. We walk into an office and its stock charts or information about recent earnings reports or something like that. There's a million ways that you could leverage this technology. I think this is really a company that you need to keep an eye on because it is a backbone kind of company for AR and potentially the metaverse long term, and maybe not a company that you would think about.