Muse users are growing strongly, but long-term monetization prospects are still questionable. BNP Paribas maintains Meta (META.US) “outperforming the market” rating

The Zhitong Finance App learned that Muse, an artificial intelligence (AI) agent under Meta Platforms (META.US), has continued to receive user attention since its launch last month. BNP Paribas quoted third-party data as pointing out that the cumulative number of downloads of Muse has exceeded 5.6 million times and is at the top of the Apple App Store rankings. Its download performance at the beginning of its launch in the US market even surpassed ChatGPT and Sora by OpenAI.

However, although Muse has shown strong user appeal, BNP Paribas believes that whether the product can turn initial popularity into long-term user activity and how to achieve continuous monetization is still an issue that investors need to pay attention to.

BNP Paribas analyst Nick Jones maintained Meta's “outperforming market” rating in the latest report, with a target price of $885. He pointed out that Meta's large social platform user base has provided an obvious advantage in promoting Muse, but the product is still in the early stages of cultivating user usage habits.

The download performance was outstanding in the early stages of launch, and the Meta social ecosystem boosted user growth

According to third-party data quoted by BNP Paribas, Muse has accumulated over 5.6 million downloads since its launch in September, and once topped the Apple App Store rankings.

Jones said that compared to other AI platforms, Muse surpassed ChatGPT and Sora in the early days of its launch in the US market. He believes that this performance is not surprising because Meta's Instagram, WhatsApp, and Facebook have a huge existing user base, which can bring natural promotion channels and user traffic to Muse.

Compared to independent AI applications that require building a user base from scratch, Meta can use the coverage of existing social networking products to increase the market exposure of new products and reduce user acquisition costs.

It is worth noting that Sora, a video generation application owned by OpenAI, quickly became popular last year, but since then it has been integrated into ChatGPT and is no longer operated as an independent application.

However, the rapid growth in downloads does not mean that Muse has established stable user usage habits. Jones pointed out that the Muse app opening rate has now stabilized, but it is still lower than mature apps such as Google, ChatGPT, Instagram, WhatsApp, and Facebook. In his opinion, this shows that although Muse has successfully attracted a large number of users to try it, it is still a long way from becoming a tool that consumers use frequently on a daily basis.

For Meta, the next phase of the key will not only drive download growth, but increase user retention, usage frequency, and long-term engagement.

Difficult to disrupt in the short term, the user experience of vertical platforms still needs to be improved

As AI agents gradually have the ability to search for information, compare products, and execute transactions, the market is beginning to pay attention to whether such products will pose a competitive threat to e-commerce, travel, and other vertical service platforms.

However, BNP Paribas believes that it is inappropriate to overestimate Muse's impact on these platforms at this stage. Jones said that although Muse initially received a good market response, considering that its user popularity is still limited and lacks the direct supply of goods or services, complete trading experience, and customer service capabilities of vertical platforms, it is still difficult for the product to pose a substantial threat in the short term.

For example, professional e-commerce or travel platforms usually not only provide information retrieval and recommendation services, but also have complete systems such as product inventory, transaction processing, order management, and after-sales support. In contrast, even if AI agents can help users discover products or services, they may not be able to complete the entire transaction process independently.

Therefore, whether Muse can further change consumers' shopping and service usage habits in the future still depends on whether Meta can continue to improve related functions and expand cooperation with external merchants.

The long-term monetization model is still questionable and the advertising business may have become an important breakthrough

In addition to user growth and product features, Muse's commercialization path is also the focus of BNP Paribas. Advertising has long been Meta's main source of revenue. However, for consumer-grade AI agents like Muse, there is still a lack of clear answers about how the company will establish a mature revenue model in the future.

According to Jones's analysis, Muse seems to be partially monetizing at this stage mainly by charging small transaction fees to partners. At the same time, Muse uses a model that combines free basic services with paid subscriptions: the basic version is free to use, while users with higher usage needs can choose to pay monthly to get a higher usage limit.

Jones believes that this pricing strategy will help Meta expand the number of users and increase user engagement in the early stages of product development rather than maximizing revenue too early. However, he stressed that Muse's long-term profitability is still an important issue facing investors.

Considering Meta's accumulated experience and resources in the digital advertising field, BNP Paribas believes that as Muse user engagement continues to increase, advertising may become an attractive commercial direction in the future. This means that Muse's future revenue stream may not be limited to subscription fees and transaction commissions, but may also gradually expand into the advertising business. However, when user usage habits have not been fully established, it is still yet to be verified whether related business models can generate considerable revenue.

OpenAI launches DOTS consumer-grade AI smart device competition or further heats up

In addition to Muse's own development, BNP Paribas is also concerned about ongoing competitive changes in the consumer-grade AI smart device market. Among them, the new product DOTS launched by OpenAI this week received analysts' attention. Jones believes that the extent to which Dots can gain user recognition in the future will be an important indicator for observing this competitive landscape in the market.

At the same time, the market is also watching whether SpaceX (SPCX.US), Google's parent company Alphabet (GOOGL.US.GOOG.US), and other technology companies will launch competitive consumer-grade AI smart devices.

As more and more enterprises explore the use of AI to complete complex tasks, competition in the consumer-grade AI smart device market may gradually expand from model performance to various aspects such as product experience, user retention, service integration, and commercialization capabilities.

For Meta, Instagram, WhatsApp, and Facebook constitute important user distribution advantages, but it will take more time to test whether these advantages can be translated into Muse's growing usage demand.