Thursday, March 2, 2017

Will #SNAP Chat fall into trap of marketing to teens & not the parents who pay the bills?


Blackberry was big.  In fact Bigger than BIG because it appealed to corporations and adolescents who used to love its messaging globally.  No idea where Blackberry is at now because along came Apple with iPhones and I watched my kids reject the Blackberry phones and switch to iPhones.

Iphones were big and soon after we got Android phones and I watched the girls switch from iPhones to Android phones (Samsung, HTC, etc.) but now Snapchat shows up with a hyped up IPO and WhatsApp and Facebook launch the same functionality a few days before the Snapchat goes IPO.

It would be prudent for Snapchat to realise that behind every kid who loves its snapping are parents who pay for the phone and data connectivity. AND kids love to try new things all the time so Snapchat better pay attention to how BlackBerry (Research in Motion) went from a $125 stock value to now $6.95 a share.

Alibaba was hyped to grow big and take over AMAZON. Amazon blindsided Alibaba before BABA's IPO and the rest is history.  The hype is not always reality.

The fact that Facebook, WhatsApp and Google+ are now doing what Snapchat is doing means that one should not bet their life time savings into this new IPO.  Just an idea but I am bearish on SNAP.
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FOR much of its short life, Snapchat, a messaging app wildly popular with young users, has befuddled those older than its core user base of 18- to 24-year-olds. The app makes little effort to help new users understand its appeal (a built-in user guide is buried deep within the app). But that did not stop 158m people from using Snapchat every day by the end of 2016, up 48% on the previous year. Snap, Snapchat’s parent company, starts trading as a public company today, March 2nd, at an expected valuation of more than $20bn. To mark the most anticipated tech-industry flotation since Alibaba’s in 2014, The Economist explains how the confounding service actually works.
Snapchat is best known as an app used by teenagers to send pictures, or “snaps”, that self-destruct a few seconds after being seen. Unlike on Facebook its users do not leave behind a digital trail of embarrassing pictures. But in the past two years it has added several other features, including a chat function, filters that overlay graphics on photos, a “stories” function that allows users to document their days and, not least, a place for media companies (including The Economist) to publish journalism and entertainment content. Yet finding all these features can be a challenge.
Fortunately, Snap’s IPO prospectus contains a detailed guide to using the app, complete with diagrams (see picture). “Making a snap is simple,” according to the prospectus. “Users either tap the camera button to take a photo, or hold the camera button to record a video up to ten seconds long. Immediately after a snap has been created on the camera screen, the preview screen displays the photo or video snap for the user to review and edit using our creative tools.” These allow users to decorate their images with text, doodles or pre-installed goodies such as stickers, personalised emoji and video effects. More than 60% of the 2.5bn snaps created everyday employ these tools. With your snap ready to go, hit the right arrow to send it to a friend.

http://nangalama.blogspot.com/2017/03/will-snapchat-fall-into-trap-of.html
The detailed instructions in Snapchat’s prospectus are not just for older users. Demand for shares is brisk but a capital structure that deprives new investors of voting rights, combined with investors’ limited understanding of what the company does or why, could dampen enthusiasm if its first few quarters are bumpy. In that way, if not any other, Snapchat resembles Facebook, which struggled to boost its stock price in its first year after listing.

At the social-networking giant’s first shareholder meeting in 2013, Mark Zuckerberg, Facebook’s boss, faced questions about privacy settings, an unfriendly mobile app and the lack of a helpline for users. One woman explained that she bought 8,000 shares on her son’s advice despite not knowing how to use Facebook. If Evan Spiegel, Snapchat’s CEO, wants to avoid a similar drilling when he confronts shareholders, it is in his and the company’s best interests to issue ever more, and simpler, how-to guides.
THE ECONOMIST 
The Economist explains: How to make sense of Snapchat | The Economist BBRY - SharpChart BABA - SharpChart AMZN - SharpChart

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