Snapchat Leaves It to Rivals to Connect the Developing World

Snapchat’s popularity grew very fast.The youth loves it, and everyone around the world wants to use it and “take snaps”. The issue that this article discusses regarding snapchat is it’s lack of ubiquity.

Snapchat has disregarded the fact that its audience is worldwide, including less-developed countries. It favors countries in North America and Europe for business because that is where snapchat has 75% of its daily users, but also because those places are where the big American dollars circulate. The company has refused to expand and customize its application for people that live in areas with slower internet to be able to use it. It focuses on snapchat updates for Apple devices more than androids.

This strategy will have a negative effect on snapchat’s user growth in the short term, and also have a negative effect on its revenue on the long term. Since the company has gone public in March, it’s investors have expectations. For the first quarter, a senior equity analyst at Cowen and Company has estimated a loss of revenue of  $2.2 billion on $142 million. This is due to an increase in expenses due to the new public status of the company.

According to the article, the reason why snapchat focuses on iPhone users is that they are an image-based company. iPhones function on fast-running networks, and snapchat’s new features such as augmented reality lenses are hard to incorporate in phones running on slow networks. Snapchat will face challenges if they don’t expand their market. Facebook, with its new features that resemble snapchat stories. Facebook has a big advantage in Asia, where snapchat doesn’t have a strong presence.

This article gives us an overview on the status of snapchat’s business as well as expectations on
how it will develop. Snapchat chose to target a specific market, which can work, but it is important for them to take these expectations in account and see if they would make more money if they expanded their business.

https://www.wsj.com/articles/snapchat-leaves-it-to-rivals-to-connect-the-developing-world-1494257835