SMS is dead. Well, almost.

email article email article print article print article tip @techmeme


SMS is dead – more accurately, dying – and why wouldn’t it be? Hundreds of millions of consumers around the world are wising up to the costs of mobile communication and because of its 160-character length, SMSes are obvious candidates for a subconscious cost/value analysis. Every so often the meme of SMSes being wildly overpriced (they are 140bytes of data after all) does the rounds.

And then there was BBM.

BlackBerry Messenger suddenly removed the need for SMS. It needed the BlackBerry installed base to reach tipping point before it became useful. The youth market, though, eventually cottoned on to the extent that you practically now need a BlackBerry to communicate with your friends. It was BBM or nothing. The beauty of BlackBerry (from an operator standpoint) is that all traffic is routed through BlackBerry’s APN (access point name) — instant messages, internet browsing, app usage, are all compressed. BBM traffic is pretty much on-network traffic which operators don’t have to worry about.

Apple wasn’t going to let BlackBerry’s domination of IM continue unchecked. iMessage, announced as part of iOS 5 which will be released in September, is essentially the same service, but for iPhone users. Apple has, however, taken iMessage a step further. It’s completely baked into the messages app on your phone which makes it seamless. You send a message (“SMS”) as usual but if your contact has an iPhone, it automatically routes the message via Apple’s IM infrastructure.

There is, however, a major problem with the BBM or the iMessage approach. What if those people you message most often aren’t using the same phone as you? The cross-platform messaging space, which has escaped attention until now, is the next battleground.

Enter WhatsApp. A lightweight cross-platform messaging app, WhatsApp, integrates with your phonebook and lets you message any contact with the app installed at a fraction of the price of an SMS. It’s the seamless integration with your phone that makes WhatsApp work so well. A scroll through my phonebook reveals the usual suspects (early adopters) are using the app, but so too are prominent executives of tech companies and mobile phone operators.

Earlier this year, Sequoia Capital invested US$8-million in the company — which, surprisingly, had not raised money yet. There are scaling issues where the service is offline, reminiscent of Twitter’s failwhale years.

Kik is a competing service which does exactly the same thing, except it’s free (WhatsApp is not). Add in all the group messaging apps (like Yobongo, Group Me) which are red hot in the US, the newly launched standalone Facebook Messenger app (Beluga) and the space starts looking crowded. But domination means being available on the most phones and right now WhatsApp is in the lead, largely thanks to its availability on Nokia devices (and some aggressive marketing from the Finnish giant).

Smartphones? Taken care of. But the real opportunity is in the feature phone space: Remember those .jar files you installed on your old Sony Ericcson?

WhatsApp is now available for two Nokia feature phones (running Symbian S40). This is the real opportunity. As much as we like to think “we’ll all have a smartphone some day soon”, the truth is very different. There are still billions more people who use dumbphones.

Now that Facebook has a stake in the ground, expect some other tech giants to move into the space. The cross-platform environment is an uncomfortable one for any of the established device makers. Operators will want to force themselves into the equation (remember the operator app stores?), but they too won’t be comfortable in the space. Facebook remains the obvious leader to be the dominant messaging platform (privacy scares notwithstanding). We’ll undoubtedly see an unexpected move into the market inside the next 12 months (an old-school phone company? a cable company? a media company?).

Messaging in Android has been conspicuous by its absence. Your move, Google…

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  • http://twitter.com/sessa Stefano Sessa

    This is a very one-sided view. While I do feel that C2C SMS communication will decline, I hardly think (and nor should you) that B2C SMS will decline. Especially seeing as it is still seeing positive growth, YOY.

    Perhaps you chose the incorrect title for your post.

  • http://twitter.com/TyronBache Tyron Bache

    This article is misleading, more accurately, it has a misleading title.

  • http://twitter.com/TyronBache Tyron Bache

    This article is misleading, more accurately, it has a misleading title.

  • Ian

    I do not think so, simply SMS is a standard, all phones use it, the battle of the IM is reminiscent of the Beta / VHS and DVD wars. Where is the Windows support (Nokia will be using it soon), let alone all the “dumb phones, Symbia, Samsung…. Stay away until thhe idiot tech heads talk to each other and agree a common standard for all!

  • http://twitter.com/c_davidoff Charlene Davidoff

    haha! somewhat of a sensational title and not very well researched. Pure speculation. 

  • Jon Hoehler

    The title is completely misleading… SMS (peer to peer) chat might be decreasing in certain segments of the market due to IM chat clients, but overall SMS messaging is still MASSIVE globally… 

    I agree that IM clients like MXit, BBM and Whatsapp are replacing peer to peer SMS with certain users preferring to use IM clients but thats isolated to feature phones and upwards. 

    Take a look at the handset universe across multiple markets and you will see that SMS very much is still alive and kicking… South Africa as an example has 200k iPhones, 1,5 Mil Blackberrys and 15mil Active WAP users. Is it estimated that around 35%/40% of all subscribers in SA use WAP and therefore can use IM Chat. That still leaves 60% of the lower end market that still uses SMS peer to peer as their primary messaging bearer.

    However the IM chat users are considered heavier texting users with higher ARPU’s than the lower segment, BUT the numbers should not be ignored

    Here are some interesting stats about SMS and messaging in general that I have posted on my blog: 

    http://jonhoehler.posterous.com/10-facts-you-may-not-know-about-mobile-messag
    http://jonhoehler.posterous.com/global-messaging-report-sms-mms-email-and-im

    SMS will still be around for years to come… And according to an ABI research stat, 4.2 BILLION mobile users this year will use SMS… #justsaying…

  • Jon Hoehler

    Sorry doesn’t seem like the links displayed on my previous post… some stats…

    1.     Revenues will break USD 300 billion in 2014…  Annual worldwide mobile messaging revenue will reach nearly USD 210 billion by the end of 2011, and smash USD 300 billion in 2014.2.     Messaging currently accounts for the majority of global data revenues…  Messaging in 2011 will still be responsible for more than 60 percent of global data revenues; SMS and MMS alone will contribute a massive 55.7 percent to global data revenues in 2011.3.     SMS brings in 13 times more revenue than Apps… SMS alone generated USD 114.6 billion in 2010, and will reach USD 126.8 billion in 2011. Compare that to forecasted mobile broadband revenues (USD 58.1 billion in 2011) and mobile application revenues (USD 9.5 billion in 2011) and there is still much to get excited about in the world of mobile messaging.4.  Over 311 million people use Mobile IM… Mobile IM is ‘the small player’ in the mobile messaging mix, generating revenues of USD 6.8 billion in full-year 2010, a substantial amount of money, but small compared to the massive USD 114.6 billion generated by SMS. Mobile IM is an extremely popular service, with more than 311 million users at end-2010.SOURCE:John WhiteBusiness Development DirectorPortio Research Ltd

  • http://twitter.com/thewomble_za Greg Mahlknecht

    I’ve been reading articles like this for 10 years.  Guess what?  SMS isn’t dead yet.  And it’s not going anywhere fast.  Journalists always report all the facts but don’t join the dots.  Yes, they’re overpriced, and yes, one day people will seek cheaper options.  The connection they miss is that when operators see SMS use dropping off, they can just cut the price, because they’re so overpriced!  SMS *will* be that cheaper option for a while to come.

    The operators just charge so much, because they can get away with it! 

  • http://twitter.com/thewomble_za Greg Mahlknecht

    I’ve been reading articles like this for 10 years.  Guess what?  SMS isn’t dead yet.  And it’s not going anywhere fast.  Journalists always report all the facts but don’t join the dots.  Yes, they’re overpriced, and yes, one day people will seek cheaper options.  The connection they miss is that when operators see SMS use dropping off, they can just cut the price, because they’re so overpriced!  SMS *will* be that cheaper option for a while to come.

    The operators just charge so much, because they can get away with it! 

  • http://twitter.com/GraphicMail GraphicMail

    I think SMS might be dying in terms of use among peers, but certainly not as business communication tool.  Especially since new innovations have sprung up that allow you to send a link to an entire mobile site packed with graphics, images and forms from inside an SMS – see http://www.cliku.com for instance.
    I think we also have to wait and see if/ when IM  channels open up to in-channel advertising and mass messaging for brands.

  • http://twitter.com/GraphicMail GraphicMail

    I think SMS might be dying in terms of use among peers, but certainly not as business communication tool.  Especially since new innovations have sprung up that allow you to send a link to an entire mobile site packed with graphics, images and forms from inside an SMS – see http://www.cliku.com for instance.
    I think we also have to wait and see if/ when IM  channels open up to in-channel advertising and mass messaging for brands.

  • http://twitter.com/GraphicMail GraphicMail

    Fully agree, see my post below.

  • http://twitter.com/GraphicMail GraphicMail

    Fully agree, see my post below.

  • Flefant

    The writer is an idiot. Sorry

  • ThatGuy

    I bet 90% of people commenting on this post actually work in the “bulk-sms-marketing-industry” and were all like: GASP!! SMS is dying!!? Fuck! Abandon ship!! ….. Oh wait… no it’s ok… phew. That was a close one. 

  • http://twitter.com/mspr1nt Ant Sims

    You forgot about Google’s Huddle for Android. Very cool and handy too.

  • http://twitter.com/mspr1nt Ant Sims

    You forgot about Google’s Huddle for Android. Very cool and handy too.

  • Paulkakuma

    SMS are expensive in some countries but in Kenya, with so much competition, they are a bargain.  I get 20sms a day for KSH5 (total) (exchange rate $1=Ksh90) AND 20 more free from Safaricom.  That;s what I call a bargain 
    Paul

  • Anonymous

    I got an iPad 2 32-GB for $21.68 and my girlfriend loves her Panasonic Lumix GF 1 Camera that we got for $ 38.76 there arriving tomorrow by UPS. I will never pay such expensive retail prices in stores again. Especially when I also sold a 40 inch LED TV to my boss for $ 657 which only cost me $ 62.81 . Here is the site we use to get it al from, http://to.ly/aXHi

  • Jason

    Both this and the previous group buying article are gaping with holes for one reason: The writer did not call experts in the industry.

    Get on the phone and be a good journalist.

  • http://twitter.com/HansMol HansMol

    SMS is dead……? He he… Funny chap.

  • http://twitter.com/HansMol HansMol

    SMS is dead……? He he… Funny chap.

  • Ryan Gerardi

    Hilton’s article title is great. It is meant to get your attention, and clearly it has. It got mine. I saw this and thought, “oh I got to hear this.” Now Hilton’s argument on the other hand is a different story and I think that is the consensus here. The proposed work around Hilton suggests for people to install apps to pay less for messaging is a real stretch to argue that SMS is “almost” dead. I can see Apple’s iMessaging alleviating costs for iPhone users and I still can’t believe Google doesn’t have a comparable messaging service still (always seemed obvious to me). Then again, G+ eliminates the need for one-on-one messaging with other G+ users so in that sense you are covered. In fact, G+ completely blows away the idea of “messaging” in the traditional SMS form. Hilton you might have a better argument suggesting that SMS is almost dead bc of G+ and similar services. 

  • Pingback: Apple to launch iMessage. Another Free Text that will Threaten Carriers’ SMS | Mobile Social Hub

  • Pingback: SMS is alive and kicking [Infographic] | memeburn

  • dave

    Google doesn’t have a comparable messaging service?  What the hell is Google Talk?

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  • Karn Bulsuk

    It’s taken a while for BBM, Whatsapp, iMessage, et al to present a threat to SMS. While it’s not going away anytime soon, we will begin to see a decline in SMS volumes in developed markets as the majority of people switch from feature phones to smart phones, in which they will have the option to actually use SMS alternatives as part of their data plan.

    It’s true that unlimited texting is prolonging the survival of SMS, but even then the overall volume of SMS sent in many developed countries is still decreasing because of these alternatives. It’s also true that in the US for example, they have begun to place data caps, but don’t forget that sending 1 MB worth of characters is still much more than sending only 1 SMS, at not even a fraction of the cost.

    The complete death of SMS will happen when the majority of people get their hands on smart phones, and with developing markets still playing catch up, it’s going to be a good many more years. SMS will decline into irrelevance like our land lines for many of us – it’ll still be around but barely used.

    I’d like to share a couple of articles related to this. This one has statistics showing the decline of SMS: http://www.bulsuk.com/2011/07/obituary-coming-death-of-sms.html

    While this one is about how the “free” nature of Android will cause smartphones to become the norm in even developing countries much quicker than expected: http://www.bulsuk.com/2010/03/google-androids-potential-to-disrupt.html

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