Despite the extended capabilities of smartphones, including cheaper communication options such as e-mail and mobile instant messaging (MIM), SMS volumes have not been dented nearly as much as predicted, and in some cases have even been boosted.
This is according to Dr Pieter Streicher, MD of BulkSMS, who points out that not only is the SMS incredibly resistant to downward price pressure, which has seen it immune to the dramatic price drops in the tech world over the past 10 years, it also refuses to be usurped by newer technologies.
Streicher notes that smartphone penetration continues to grow at a rapid rate. Research firm Gartner saw in excess of 81 million smartphones sold worldwide in quarter three, 2010, accounting for 19.3% of all mobile phone sales that quarter.
“This is a massive 93% increase from the same quarter in 2009. Closer to home, Gartner reports 16% smartphone penetration in South Africa at present, ramping up to 80% by 2014,” he says.
In October 2010, the International Telecommunications Union predicted 6.1 trillion SMS messages would be sent last year.
Portio Research forecasted earlier in the year that SMS traffic would exceed 10 trillion by 2013. ABI Research reported that there would be 4.2 billion users of SMS around the world in 2011.
Dire predictions
With these predictions, Streicher says previously there have been some dire predictions that SMS's days are numbered thanks to the smartphone, and specifically because of an increased uptake in mobile instant messaging.
“Let's face it; this is a 40% drop. But what the survey doesn't show is to what extent overall messaging has increased, which would reduce the real drop in SMS messages sent,” he says.
For the reasons why the SMS has remained persistent and resilient in the face of bright and shiny new ways to communicate, Streicher says SMS is ubiquitous and comes pre-installed on all phones. 4.2 billion people actively use SMS, according to market watcher Tomi Ahonen.
“You know the recipient will be able to receive an SMS and be able to respond to you. Compare this to smartphones - according to research from online market company, Compete, 27% of owners have never downloaded and installed an application, including MIM applications, on their smartphone.”
Market fragmentation
Additionally, he says, the MIM market is highly fragmented and different platforms have different ways of identifying users - unlike SMS which only needs a cellphone number, which the user generally already has.
He also explains that despite a couple of attempts to integrate various MIM platforms to produce a universal application, there is no real incentive to do this from the operators' points of view, since so much revenue is being earned from SMS.
There is also no incentive for individual MIM platforms to open up to others, he adds, arguing that standing alone, the biggest MIM platforms are orders of magnitude smaller compared to the SMS platform in terms of the number of phones that run them.
“There is no denying that MIM and specifically BlackBerry messenger and WhatsApp have a large and growing user base, but the impact on SMS will be far less than expected. In SA where MXit has a significant penetration, SMS is still widely used by MXit users,” he also points out.
According to Streicher, user behaviour has a large role to play as well. “In the same way that users are increasingly migrating from voice to SMS because of the asynchronous nature of SMS - although the communication is immediate, it is less disruptive and you can reply at your leisure - it is likely to also be a reason for users to prefer SMS to MIM for certain types of communication.
“The lower volume of SMS messages received makes it more effective as an alert and notification medium.”
He also adds that SMS has become an acceptable way to communicate with business contacts and people you don't know that well, noting that even among die-hard MIM users, SMS is preferred when communicating with certain audiences.
“Likewise, while business communications via SMS have become acceptable, it is unlikely the average user would appreciate a company initiating a conversation with them via IM, or even dish out an IM username to a company, for that matter,” he argues.
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