It's hard to know where, exactly, Snapchat stands right now.
On one hand, the company is performing exceedingly well, with a huge hold on the Millennial market (Snapchat says their app is used by 41% of all 18 to 34 year-olds in the United States) and a valuation in the vicinity of between $20 billion and $25 billion. The app has 150 million daily active users, and Facebook is copying them at every turn, so they're clearly doing something right.
This all sounds pretty good, but then there's the other side of the coin.
While the app does have (reportedly) 150 million users, that figure was revealed last June, and there's been no update since. Since then, Instagram, has released Instagram Stories and Facebook has tried out a range of new, Snapchat-like options, all of which, you'd assume, must be having some impact on Snapchat's growth and adoption.
Indeed, a report this week from TechCrunch suggests that Instagram Stories has taken significant market share from Snapchat, with many analytics providers, brand managers and celebrities reporting big drop offs in Snapchat viewership - and big increases in Instagram Stories engagement.
Given this, and given Facebook's strategy to target markets where Snapchat has not yet gained a foothold, it would seem that Snapchat's growth options are becoming more limited. But then again, that's Snapchat, the app, Snap Inc., the app's parent company, may have something else up its sleeve - and we may have seen the first hints of what this is.
A new report published on The Information suggests that Snapchat is in fact, working on an entirely new innovation - new, advanced lenses that would be able to detect and respond to the environment around you.
Just as the current Lenses transform your face with digital masks, the new option would transform your reality, with the ability to identify environmental elements and layer objects which engage with that scene - like adding a blimp in the sky or making real clouds come to life on screen.
The tool would be an advance of their "World Lenses" option which they introduced last November - with World Lenses, you can switch to the outward facing camera and layer animated graphics over your environment.
The proposed new option goes beyond this, by using image recognition to identify and respond to real world elements, creating a whole new experience.
This is not even the first time we've heard of such tools from Snapchat - back in July we reported that Snapchat had registered a patent that detailed their plan for image-recognition triggered ads and graphic overlays that would respond to real world objects.
The example provided in the patent was an image of King Kong on the Empire State building - using this new process, if you were to take a photo on the north side of the Empire State Building, Snapchat's image recognition system would identify the angle of the building and give you the opportunity to attach an image of King Kong looking at you. However, if you were to take a photo on the south side, you'd be shown an image of King Kong's back.
They've even released a version of their image-recognition triggered content - if you hold your finger on the screen in Snapchat while looking at the Spectacles logo, it'll give you a Spectacles-themed lens, triggered by the object.
Given this, the proposal of a new, reality-altering lens option is no surprise, but it may actually be pointing to Snapchat's next shift - one which could help them avoid the impacts of Facebook's efforts to stomp the app out.
Back in September, when Snapchat launched Spectacles, they also launched their new company name - Snap Inc.
As you can see, Snapchat not only changed in name, but in identity - Snap Inc. is not a social networking business, it's a camera company.
Most saw this as a hedge, as a means of trying to avoid unfavourable comparisons to Facebook, which have plagued other social networking competitors. This is most evident with Twitter, which itself changed its classification from a "social network" to a "news" app in The App Store last year.
But while many dismissed Snap Inc.'s camera focus, it's possible that there's more to it than what it may seem.
Could it be that Snap Inc. is actually looking to put more emphasis on Spectacles in future, knowing that their social app will likely face tougher times as Facebook ramps up its competitive efforts?
This is where Snapchat's proposed environmental lenses become much more interesting - what if these new tools are not designed for Snapchat, but for Spectacles? Imagine being able to view the world with these new animations and graphics through your glasses, providing an immersive new experience unlike anything else.
Of course, right now, Spectacles can't do anything like this right now, they simply record what you see and enable you to post it to Snapchat. But it's quite possible - if not likely - that this was only the first stage of Spectacles, a test to see if Snapchat could overcome the challenges of other smart glasses options - most notably Google Glass - and create a new tool that people would want to wear and use.
They've arguably succeeded on this front, the hype around Spectacles was huge, and still carries on today, and Snapchat has just recently set up a new research and development facility in China, close to wear Spectacles are assembled. The next stage or Snap Inc. might not actually be about Snapchat at all, it may just be about cameras - new AR camera glasses that can detect objects, layer graphics over the scene - even provide ad content based on image context.
Again, the tools for this next evolution are already laid out - another element of the aforementioned patent outlined how Snap Inc. would look to provide ads based on image recognition - if you took a Snap of a cup of coffee, for example, you could be offered a discount coupon from an advertiser based on that Snap.
But what if instead of taking a snap, you simply tapped on the button at the side of your Spectacles?
In addition to this, in December Snapchat reportedly acquired Israeli-based startup Cimagine Media, which specializes in computer vision, with a focus on the benefits of augmented reality for eCommerce.
And before you say "yeah, but Google Glass failed", Google Glass faced various problems which impeded adoption, but before consumer sentiment tailed off, it was projected to become an $11 billion market. That's far beyond the current expectations for Snapchat's ad revenue moving forward.
On balance, it would seem inevitable that Facebook will eventually stomp out Snapchat as a social app - they simply have more users, more resources and more tools at their disposal. Their latest effort on this front may even be coming very soon, with Facebook reportedly looking to launch new animated selfie masks as an ad option, with The Social Network pitching several Hollywood studios on how they could use the tool to promote upcoming movies.
If Facebook can advance Snapchat tools like Stories and Lenses beyond what's on offer on Snapchat, and introduce such offerings in regions where Snapchat hasn't built a presence, that has to limit Snapchat's growth. And as Twitter has shown, investors need to see growth.
Snap Inc., on the verge of an IPO, must know this. And maybe they already have a plan to counter it.
UPDATE (2/2): Snap Inc. officially filed for an IPO today - no mention of Spectacles evolution. Yet.