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Chat Apps
Chat Apps' Message Volume Overtakes Traditional SMS

By Barry Levine
April 29, 2013 11:03AM

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Chat apps are used more frequently, with an average of 32.6 messages daily for the average user, compared with just five SMS texts. A key reason for the discrepancy could be that carriers often charge for texts, while chats are free for users with data plans. However, many text users have unlimited texting plans. Additionally, chat users could be SMS users as well.
 



Is it impending curtains for SMS? A new report finds that traffic for chat apps have overtaken short message services (SMS) for the first time.

The report, from the research firm Informa, said that nearly 19 billion messages were sent daily on chat apps last year, while SMS texts shipped a mere 17.6 billion. If the trend continues, the changing preference could mean more than simply a different way to send text and other messages to individuals via your mobile device. It could mean a substantial revenue hit for telecommunication carriers.

Another researcher, Ovum, has estimated that more than $23 billion of revenue from SMS was lost to carriers last year because of the rise of chat apps.

'Identity Is Slippier'

Informa said that chat apps, such as the popular WhatsApp, are expected to extend their lead over SMS. It projected almost 50 billion daily chat messages by the end of next year, with SMS at about 21 billion. This is still an increase in SMS, but not at the rate that chat apps are growing. Nevertheless, Informa analyst Pamela Clark-Dickson said "there is a lot of life still in SMS."

Clark-Dickson noted that chat apps are most often used on smartphones in the developed countries, while there are fewer smartphones and a greater use of SMS in developing countries, where data plans and Wi-Fi are not as ubiquitous. Because of these kinds of factors, Informa expects SMS revenue to grow to about $127 billion by 2016, from about $115 billion in 2012.

Brad Shimmin, an analyst with Current Analysis, said texting is very popular in some developed countries as well, such as the U.K.

He noted that "identity is slippier" for chat apps, since users can change their names. SMS, on the other hand, is sent to a more permanent phone number. If chat apps take over, Shimmin said, it would be something of "a step backward, because you'd be giving up the connectedness between two devices." Chat apps, on the other hand, "put their faith in the cloud."

Messaging Frequency

Shimmin said chat apps potentially offer "so much more" in terms of carrying multimedia, and there are untapped opportunities for carriers, such as carrier-connected apps or value-added services.

But SMS still has more users. Informa estimates there were 3.5 billion SMS users last year, compared with about 586 million users of chat apps. However, the report only evaluated six of the many chat apps -- WhatsApp, Blackberry Messenger, Viber, Nimbuzz, Apple's iMessage and KakaoTalk. Some of the many other apps include Facebook Messenger for Android, estimated to have 100 million to 500 million installations, and China's TenCent, with something in the vicinity of 300 million users.

Chat apps are used more frequently, with an average of 32.6 messages daily for the average user, compared with just five SMS texts. A key reason for the discrepancy could be that carriers often charge for texts, while chats are free for users with data plans. However, many text users have unlimited texting plans. Additionally, chat users could be SMS users as well, and vice versa, especially since texts can communicate to any phone while chat apps require compatibility and a smartphone on the other end.

Some device makers are following the traffic. Last week, for instance, device maker Nokia announced that it was releasing a low-priced phone for developing countries, the Asha 210 in both single- and dual-SIM versions, that would feature a dedicated hard key for WhatsApp, as well as a free subscription to that service.
 

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