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Summary

Peach is a new media-first social communications app for iOS, developed by Dom Hofmann, cofounder of Vine (which was acquired by Twitter in October 2012 for $30 million and has since been integrated into Twitter). Peach is a multipurpose app that embraces the sharing zeitgeist of social communications services, but it differentiates itself by applying a sophisticated search capability to on- and offline resources. The question is whether Peach is different enough to survive in an already crowded market.

Peach adds a little “magic” to communications

Peach is an app that’s trying to be a little bit of everything. It’s a social media app where users can post content, add friends (including brands), and follow “spaces” (i.e. pages). Users can set their privacy to “friends” or “friends of friends” for now. It’s a bit like the enterprise messaging app Slack in that it uses what appears to be a bot-based search function, called “Magic Words,” to allow users to easily access resources and applications on their device. Peach is also shaping up to be a messaging app with rich-media capabilities, thus tapping into the popularity of content-sharing apps such as Instagram and Snapchat.

For now, it’s the Magic Words capability that sets Peach apart from its peers. With “magic” words such as “battery,” “event,” “browser,” and “song,” Peach can return information to the user from applications on their device or give them easy access to resources such as their music library or the Internet. Magic Words also allows users to draw, search for a GIF, “shout” (i.e. write in big letters on a colored background or over a photo), and share information about movies, TV shows, video games, and books on their space. Information about Magic Words is easily found within the app.

The use of bots and artificial intelligence in communications apps is growing, but the market for these apps remains nascent, with most apps either in development or at beta stage. Such apps include Facebook’s M virtual assistant and chat-based shopping apps Operator, Assist, and Magic. Google is also reportedly building bot capabilities into its new messenger.

There’s no doubt that Peach is an innovative app that pushes the boundaries of what a communications app can do, but there are key features that it does not yet have. Some of these features are already in development, such as direct messaging and cross-platform support. However, there is no indication that Peach will move further into the communications space to add VoIP and video calling, which have become standard features on other social communications apps.

Although Magic Words is not yet as sophisticated in scope as, say, Operator or Assist, what is interesting is that brands are already starting to engage with Peach, in much the same way as with Twitter and Facebook. Establishing a similar engagement model to Twitter and Facebook has given Peach a head start in terms of providing users and brands with a familiar experience. In addition to personal contacts, Peach users can add brands as friends. Enterprises often experiment with new social media apps, but what is unusual about Peach is that brands (notably Merriam-Webster, MTV, and Popular Science) have engaged with it so quickly. Early engagement from enterprises bodes well for monetization later on.

But Peach faces a number of challenges. It will need to be careful about how it manages privacy and data security. For example, through Magic Words users provide data about their activities which might be useful to brands and enterprises. Also, the company will need to establish identity-verification procedures to prevent certain usernames from being hijacked (e.g. those of brands and celebrities).

Building a significant user base to the point of monetization will be another challenge for Peach, especially in the social communications market, where the main players have hundreds of millions of users and are continuing to grow. To increase market share, Peach will have to convince users to add another yet app to their collection or churn from an existing app. Neither scenario is beyond the realms of possibility: Ovum’s Consumer Insights Survey 2015 found that about 70% of respondents used two or more apps for messaging, and about the same proportion used two or more apps for sharing pictures and content, indicating a partiality towards the use of multiple apps for social communications. Also, Peach has already been praised for the ease with which users can sign up and add friends. So far, users (and brands) seem happy to try out the app.

It is also possible, however, that Peach will not be successful with its mash-up of features from existing apps, even if it does enhance these features with its own innovations. It might also not be able to scale beyond enthusiastic early adopters. If this turns out to be the case, then Peach risks being a short-lived fad, similar to the single-word messaging app Yo, which was also welcomed with great enthusiasm. To avoid this scenario, Peach needs to prioritize cross-platform availability and the addition of new features that will continue to secure the interest and increase the engagement of users and brands.

Appendix

Further reading

OTT Communications Tracker: 3Q15, TE0003-000889 (December 2015)

Social Media Tracker: 3Q15, TE0003-000881 (October 2015)

Digital Economy 2025: Consumer Services, TE0003-000876 (November 2015)

Ephemeral Messaging: Beyond Snapchat, TE0003-000863 (July 2015)

Author

Pamela Clark-Dickson, Principal Analyst, Consumer Services

pamela.clark-dickson@ovum.com

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