Cash cow is dying as messaging apps overtake SMS by volume

By , Apr 29, 2013

imessage

For the first time, more messages are being sent via applications such as iMessage, WhatsApp and Viber than traditional texting. That’s the message of a new study which found that messages sent using such apps outnumbered those sent through carrier-based SMS in 2012.

That lead is expected to widen this year as chat apps send twice as many messages as texting. The study by Informa suggests the lucrative business of text transmissions could be winding down for carriers.

Although traditional SMS has a larger user base, iMessage, WhatsApp or other chatting apps are sending more texts per user, giving them the momentum…

On average, a chat app user sends 32.6 messages per day, versus just five for SMS, according to the Informa study shared by Financial Times.

This despite there being 3.5 billion SMS users compared to 586 million among the top six messaging apps surveyed by the researchers.

However, don’t cry just yet for carriers.

The cell firms are expected to earn $120 billion from texting, a service which essentially rides for free on existing voice connections.

As SMS celebrates its 20th anniversary, some cell phone providers are partnering with upstarts, such as WhatsApp which claims it handles 18 billion messages every day. And Nokia, for instance, sells the handsets specifically optimized for the popular chat app.

We could see the popularity of messaging apps wane if they decide to charge for the service. WhatsApp, for instance, is reportedly considering a paid 99 cents a year subscription.

Carriers, on the other hand, basically give away unlimited texting when you purchase a data plan. Perhaps most interesting is the evolution of communications underway. First was the voice call, which largely vanished as texting became common.

Now, as smartphones outnumber dumb feature phones, app-based messaging is set to eclipse texting. The next evolutionary step is likely to be calling from Facebook, now in limited roll-out, and other social networks.

Do you tend to use SMS over chat apps or the other way round?

  • Share:
  • Follow:
  • iBanks

    I think the ability to have messages in sync with multiple devices is the golden feature in this increase.

  • http://twitter.com/AJNeedles Aaron Cardwell

    The next stage is “all data” and only paying for data plans. Why hasn’t it happened yet…

    • RarestName

      It happened in Singapore. Back then, the telcos felt that no one uses cellular data, so they offered 12 GB of data for all iPhone data plans. Recently, they decreased about 83.33% of the cellular data (down to 2GB) offered for the cheapest plan and increased the SMS limit. They claim that it will make the cellular connection more stable. Yeah, more like making people pay more for exceeding the data limit. If they really wanted to make 3G faster, they wouldn’t have done this and introduced 4G at the same time.

    • Al

      I believe T-Mobile has an all data plan… I would switch from AT&T, but since I’m on a family plan with 2 lines with unlimited data plan. I’ve been with AT&T for awhile now, unless they do something outrageously like force me off my unlimited data plans then I’ll make the switch.

      But as of now… T-Mobile has a bright future compared to all the other carriers.

    • http://twitter.com/AJNeedles Aaron Cardwell

      More companies need offer unlimited plans for people to switch to all data. The australian company I use “Optus” offeres unlimited everything for $2 a day. This is what more companies need to follow.

  • http://www.facebook.com/linton.findlay Linton Findlay

    i think they need to improve data reception as a whole before they get rid of sms there are some places that have a reception but a very poor data reception

  • Chuck Norris

    *roundhouses SMS texting*

    • iospixel

      Reminds me of that family guy episode… Roadhouse

      /watch?v=qeIchRv7aEQ

      On a serious note I’d love to see the data broken down geographically. I imagine the transition in the richer countries of the world would make interesting viewing in comparison to the markets in which the smart phone companies are trying to infiltrate. I still think that Nokia can’t exist without these markets. Nokia may go the way of Polaroid if these company’s succee

  • seyss

    that’s one of the reasons why carriers wanna destroy net neutrality. bastards

  • http://gxgow.tumblr.com/ Nicolas Loots

    Since few of my friends have a smartphone or are not 24h/24h online on e.g. Facebook, I am still using SMS on a daily basis. Data plans in Belgium aren’t always that cheap, especially when they’re unlimited, and we don’t even have HSPA/3G everywhere.

    • iospixel

      Crazy. I think everyone in my contact list in contactable via another messaging service other than SMS. Be that BBM, Whatsapp, Viber, Message me, FB, Email. Not that they’re all cross platform so sometimes as an iPhone user I’m forced down the SMS route. If BBM was available for iOS and if a subscription warranted it I’d never need SMS again.

      • http://gxgow.tumblr.com/ Nicolas Loots

        I agree with you. Using IM services like Whatsapp only is something we can only dream of. If only everyone was smart enough to use a smartphone. I mean, I can’t really imagine my grandma using Whatsapp on an iPhone.

      • iospixel

        Good point. Everyone under the age of 35 in my contact list. If they don’t have a smartphone by choice they’ve usually been influenced by a loved one.

  • Gorgonphone

    my iMessage cant end images sooooo i still have to use ATnt for that…lolo

    • ghulamsameer

      That shouldn’t be a problem.

  • blu

    I have never had or wanted texting. It is a ripoff plain and simple.
    Now than the wife and I have iPhones, we can iMessage each other on our existing data plans. I use google voice for calls so my 450 minutes are plenty for my wife and mom to share.

  • http://www.facebook.com/wyatt.amacker Wyatt Amacker

    Ha I love it how the picture you included with the article has a UK service provider…

  • http://twitter.com/Antoniogzzx onebyone_

    some carriers will throw his machines to drop on the junk.