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Now that the wraps are off iOS 5, we can start to review what some of the new features and apps will do for the rest of the telecommunications ecosystem.  Since we are a messaging-centric company, among other things, I thought I’d take a few minutes to look at the potential impact of iMessage and what it has the potential to do to SMS and MMS.


First off, iMessage is a closed IM/messaging service between iOS devices – namely iPADs, iPod Touches,  and iPhones (running iOS 5).  So, in a way this is no different than WhatsApp, Beluga (group messaging) and other similar apps.  Note that it is NOT interoperable with Android, Blackberry, Windows and other smartphone Operating Systems and it does not interoperate with the 5 billion SMS capable devices out there today.

Still, in markets where iOS is dominant, you might find some cannibalization of SMS as well as MMS when multiple users with iOS devices begin to use iMessage vs. SMS to text to one another.  iMessage has implications in the Enterprise as well – as there are a variety of new iOS 5 APIs, I would presume, many are around iMessage.  It supports both delivery and read receipts, secure encryption and conversations can be pushed to multiple devices.   iMessage works on both 3G and WiFi networks.

Almost 10 years ago, a handful of companies, including InphoMatch (a predecessor to Sybase 365)  pioneered hub-based SMS interoperability.  Now, messaging hubs account for almost 5 billion messages per day – within the United States and globally.  MMS interoperability via messaging hubs, was first launched by InphoMatch (then, becoming Mobile 365) in late 2004.  Today, mobile messaging has become the most ubiquitous non-verbal communications medium in the history of mankind.  Nothing, not IM, not the various smartphone messaging apps have even come close to cannibalizing this service.  iMessage WILL have some impact, in specific markets, but remember; most of the world still uses and will continue to use SMS for a long time to come.

Since the iPhone 4 was launched, we do not have an interoperable FaceTime (iPhone’s proprietary video chat), even though it was supposedly built with standard interfaces.  But the video chat ecosystem is very weak, with many other incompatible services.  SMS and MMS have a huge global ecosystem in place – one that even Apple, with all of its rather closed garden approach would do well to interoperate with.  Still, given their history with FaceTime, I would not get my hopes up just yet.

Now, don’t count out Android yet, either.  Remember, Android is owned by Google and Google has Google Voice, which includes both Voice and an SMS that is interoperable with the P2P SMS ecosystem. This is why NUVOs are important and should be carefully courted by the existing telecommunications ecosystem.  They are interoperable with everyone else – they use Telephone Numbers as universal addresses and are not limited to a closed system of devices or operating systems.

If iMessage does cannibalize SMS for NUVOs and Mobile Network Operators (MNOs), then by how much? Let’s look at the numbers.  In the United States, ComScore just noted that the Apple Smartphone platform moved to 2nd place, ahead of Blackberry for 26% market share of the smartphone market.  ComScore, elsewhere noted that approximately 75 million Americans were using smartphones – so that is 19.5 million iPhones in the USA.  At this point, we are just talking about smartphones – no tablets, or iPod Touches yet.  Our numbers, along with those from Informa Telecom & Media note that Americans send, on average, around 950 to over 1000 messages per subscriber per month. Various statistics have shown that smartphone users are, by far, the heaviest users of SMS.  For our calculation, let’s call this 1050 messages per SMARTphone subscriber, per month.  So the potential impact is approximately 20.475 billion SMS messages per month (or more precisely SMS and MMS messages) that might disappear, replaced by iMessages.

CTIA, in their Semi-Annual Wireless Industry Survey, estimated that in 2010, 2.052 trillion SMS messages were sent in the United States.  That’s 171 billion messages per month.  Then our messaging impact could be as high as approximately 12% of the total SMS.   That doesn’t sound quite as bad, does it?

But that’s not the whole story. Apple iPhone users are not going to suddenly stop using SMS.  Because the 12% impact assumes that.  In reality, Apple iPhone users will still use SMS to reach the other 283 million U.S. non-Apple mobile phone users, as well as billions of other people around the world, not using iOS products.  So the real impact is probably at most, closer to 1-3%, if that much, given that these users will continue to send SMS.

I used the United States as an example, but the iPhone is now a worldwide device.  I would expect similar impacts in other iPhone/iOS heavy markets.

Today’s iOS and iCloud announcements will further impact the mobile ecosystem.  I’ll have more to say about several of these new features and what they mean to messaging, mobile enterprise and other areas in the coming weeks.

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