SMS is dead. Well, almost.

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…



Sign up to our newsletter to get the latest in digital insights. sign up

Welcome to Memeburn

Sign up to our newsletter to get the latest in digital insights.