Samsung Argentina launched a new site that enables users to see and buy Samsung’s smartphones via Instagram. Recent studies indicate that the photo-sharing app is the fastest-growing property on the internet, with approximately 90 million people using it at least once a month.
By advertising and selling Samsung devices over Instagram, Samsung is attempting to leverage the power of interactive pictorial and video advertising on social media to increase its mobile device market share and further reduce its dependence on mobile operators to sell their devices. Reports from 2014 indicate that Argentina’s smartphone penetration is relatively high for the region—12 million to 14 million mobile phones sold annually in the local market—although sales continue to be held back by the high cost of devices. Samsung is trying to simplify the device-purchasing process and to eliminate the additional charges and/or lengthy contracts that might be added by mobile operators.
In Asia, South America, and many other parts of the world, users buy their preferred mobile phone first and then go to a retail outlet to buy a SIM card for voice and data services. Many Argentinians own multiple SIM cards, some having a phone for each mobile operator to take advantage of special offers. Using multiple sales strategies leveraging social media, mobile operator promotions, and direct sales, Samsung is trying to use any avenue available to reach consumers with its mobile devices. We would expect to see an expansion of this strategy beyond Argentina on the part of Samsung as well as other device manufacturers. In the future, mobile operators will likely have to rely less on device sales and more on value-added services for revenues.
“More and more operators are offering a wide variety of plans that do not include mobile devices. While mobile operators continue to be major distributors of devices, they are trying to differentiate the sale of their mobile services from the sale of handsets. It seems that this approach meets customers’ expectations for flexibility. Subscribers can select a specific mobile service or a plan, buy a SIM card and use it on the handset they already own. Device purchase is not necessary as long as the handset is compatible with the SIM. Tri SIM cards, offered by a large number of operators including Telekom Romania, solve the issue of SIM incompatibility. As mobile operators concentrate on selling services, device manufacturers are exploring other distribution channels to sell their products, such as Samsung’s use of social media (Instagram) as a third-party venue to distribute its mobile handsets.”
Edyta Krzton, Senior
Analyst at Tarifica
The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues: http://www.tarifica.com/TarificaAlert.aspx