While the rise in mobile instant messaging (MIM) has been heralded as the end of the SMS, a closer look shows this actually increases the SMS' value in the corporate space.
According to a recent Juniper Research study, SMS has one distinct advantage over MIM services - its ubiquity.
“With an SMS, I know I can reach almost any handset in the world, if I have its number. While IM services have some advantages, such as real-time communication and apparent absence of cost, the market is fragmented by different services that cannot communicate with each other,” says Daniel Ashdown, research analyst at Juniper.
The research firm says within the SMS market, revenue from application-to-person (A2P) SMS will exceed $70 billion by 2016, overtaking person-to-person during that year. A2P messaging - defined as those messages that are sent to or from an application - has a wide variety of use-cases, including financial services, ticketing, and any other service involving sending or receiving a large number of messages, Juniper Research adds.
On the other hand, the firm forecasts that the number of MIM users will exceed 1.3 billion by 2016. This tripling of users from 2010 will be driven by the arrival of new services, such as Apple's iMessage, and continued growth of existing services, such as AOL's AIM, BlackBerry Messenger (BBM), Microsoft's Windows Live, Skype and Yahoo Messenger, it explains.
Nine lives
Pieter Streicher, MD of BulkSMS, notes that “while a cat has nine lives, it seems the SMS has an infinite number of lives”.
He believes the BlackBerry and its free messaging service between BlackBerry users changed the MIM game.
“Despite being bumped down the ranks in terms of the number of handsets shipped in the second quarter, according to the latest analyst reports, BlackBerry is still the number one smartphone in SA and Indonesia,” says Streicher.
Mobile market commentator, Tomi Ahonen, says the BlackBerry's popularity initially baffled Research In Motion itself, until it realised that it was the BlackBerry Messenger service that was the driver of this uptake.
It also resulted in continued uptake of the handset, as friends and family migrated to BlackBerry for fear of being left out of closed conversations, says Ahonen.
Subsequently, Streicher adds, application developers have allowed other handset owners to join this low data cost instant messaging conversation via apps such as WhatsApp.
With all these developments, he says, one might think this has left SMS out in the cold. “In the world of business SMS communications, this is not at all the case. There is no denying that personal SMS usage has dropped, thanks to cellphone users migrating to MIM at a fraction of the cost of SMS.
“This is hurting the network operators, for whom person-to-person messaging is a very profitable channel. But SMS's inherent features still give it an edge in application-to-person messaging, especially when it comes to urgent or emergency communications, business communications, or managing the information overload,” he says.
Lost revenue
Streicher points out that while the popularity of MIM might be bad news for operators in terms of lost SMS revenue, it is good news for companies and organisations that rely on SMS for alerts, emergency communications, customer relationship management and a host of other uses.
“The SMS channel is strengthened for mission-critical notifications, whether it is a banking alert, appointment reminder or progress update. Already IM users are switching off the beeping associated with incoming instant messages, as it is unnecessary during a conversation. The rather ironic result is that SMS is used as an alert to set up an IM conversation.”
Companies have dabbled with other online channels, but they are going to be hard-pressed to insist that customers download an individual app in order to communicate with each company, he explains.
“SMS, which is already built in to every single feature phone and smartphone handset, is going to remain the communications channel of choice for companies and customers for some time to come.”
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