Free mobile messaging apps such as WhatsApp, Kik, Viber, WeChat and MessageMe are getting so popular mainly because they are cheaper than the alternative i.e. our very own cash cow- SMS and these messaging apps are eating away the Telecom operators SMS revenue.
Unless you have been living in an isolated island this trend is not much of a surprise. This traditional Mobile messaging value chain has cracked, as there has been an emergence of virtual phone numbers that have bestowed an opportunity for IP based messages to compete and cooperate with the carrier’s, by affixing interoperability to their services.
Is Chat Apps Replacing SMS?
According to Telecom and Media consultancy firm Informa, in 2012 almost 19 billion messages were sent on daily basis, compared with 17.6 billion SMS texts, and by a separate estimates by research firm Ovum more than $23bn of SMS revenue was lost in 2012, this information is a no shocker given that the global penetration of internet –connected Smartphones was quite high with 85% and 79% in the U.S and U.K alone in 2012. In many countries Smart phones have outdone feature phones in terms of shipments.
SMS Still Has A Long Way To Go
According to Informa SMS Revenue is also getting a breakthrough, it is expected that SMS will help its carrier’s accomplish $127 billion by 2016, up from $115 billion last year. Though Social messaging apps are cheaper and more avant garde but still there are large number of consumers especially in emerging markets who still prefer using featured phones and traditional SMS system, emerging markets are quite price sensitive and even though there is a desire for using high end phones, Smartphones are still a luxury good for them, so SMS is the only messaging tool they to rely on and the main advantage of using SMS as a communication tool is that it works on any phone be it feature or Smartphone, anybody and everybody can use it without any difficulty, and basically SMS is defined with certain standard unlike WhatsApp when it comes to communication medium.
Though SMS has certain advantages to it, the chances of survival are very uncertain. By 2014, Informa expects 50 billion messages to be sent by WhatsApp, Kik and other messaging apps in comparison with 21 billion SMS. Today technology is advancing in leaps and bounds and according to a latest announcement, Nokia corporation (NOK) is launching Asha 210 Qwerty phone with a dedicated WhatsApp button at a very affordable price range. With this amount of radical changes happening in the Mobile world, traditional ways will not work out for a longer period of time. If SMS reinvents itself in a modern way who knows SMS messaging may regain its lost position. By enlarge it’s too early to be talking about the demise of SMS because the Smartphone Market has not yet charmed everyone.