Why Text Messaging Still Thrives Despite Smartphones, Twitter and WhatsApp

The tech industry attracts the worst kind of futurists, Clayton Christensen-quoting types who behold shifting paradigms, looming inflection points and disruptive innovations everywhere they look.

The futurism business is so competitive these days that technologies get declared dying at the very moment they are actually peaking. In monarchy terms, that’s like preparing to crown the boy prince when the reigning king is a hale and hearty 40-something.

So it goes with text messaging, aka SMS. Nobody disputes that SMS  is the king of mobile communications today. 7.8 trillion SMS messages were sent last year, according to Portio Research. Another firm, Informa, counted 5.9 trillion text messages worldwide last year, comprising 64% of mobile messaging traffic. You also have research showing that in developed countries, texting has just become more popular than voice calling.

Not only is SMS on top, but it’s still growing substantially. Portio predicted earlier this year that it will increase 23% this year to 9.6 trillion SMS messages.

According to Portio: “SMS is not dead. SMS is still the king and will remain so for some time to come.”

Yet, many experts have already declared the death of SMS. Consumers don’t care – they’re too busy texting. And some companies are reaping the marketing benefits (see Mobile Marketer for more North American case studies and Sybase 365 for the rest of the world).

But too many companies are being persuaded not to invest in SMS or its picture/video-enabled sibling, MMS, in favor of building native apps, or waiting to see what the mobile IM services or Twitter or even fast-rising ‘free’ Over-The-Top (OTT) services like WhatsApp.

I understand that there is a consumer desire for a cheaper alternative to SMS. But I think that companies waiting for the death of SMS will wait for a lot longer than they expect. In the meantime, there will be huge costs, in the form of blown opportunities to exploit the right-time, contextual marketing capabilities of mobile today.

As much as I’m a champion of apps, they remain largely a first-world phenomenon. Globally, smartphones that can run apps were outsold by featurephones by 2:1 last year.

The research firm mobiThinking estimated earlier this year that based on the 6 billion mobile subscriptions and the roughly 1 billion smartphones sold in the last 3 years, at most only 16% of mobile phones in use worldwide today are app-enabled. AT MOST.

“The media tends to overegg the importance of smartphones and Apple in particular,” wrote MobiThinking. But “businesses that ignore featurephone customers do so at their peril.”

Put another way: “If you’re a major global brand and all you use are apps for marketing, you’ll miss out on 70-80% of your customers,” Howard Stevens, a senior vice-president at SAP division, Sybase 365, told me in a recent interview.

Stevens, of course, has a horse in this race. Sybase 365 is the largest independent carrier of mobile messaging, processing more than 2 billion messages, mostly SMS, per day. It also provides back-end services for enterprise marketing and communications, such as real-time alerts, interactive polls, banking and coupons – all via SMS. But I think his advice is solid:

– “Even those [consumers] who have smartphones, there’s no guarantee they have or will download your app.”

– “I don’t believe it’s apps versus SMS. You need to have all channels covered. You can’t do it all with in-app notifications. The only truly ubiquitous form of communication is voice or messaging, and SMS is the most prevalent.”

FaceBook, which is often touted as one of the OTT players that will kill SMS, evidently agrees with Stevens. Last week, it added the ability to send and receive text messages from its FaceBook Messenger app for iPhone and Android.

What Does The Future Hold?

Admittedly, there are a ton of OTT players that are vying to beat SMS, including: traditional instant messaging services like Yahoo Messenger or AOL, BlackBerry Messenger (BBM), VoIP services like Skype, Apple’s iMessage, FaceBook, Twitter and, most formidably today, WhatsApp.

The free WhatsApp, unlike BBM and iMessage, is not restricted to particular brands of devices. And its fast rise – it carries 10 billion+ messages a day, up from 1 billion 10 months ago – means it is nearly half the popularity of SMS today.  

There are several things, though, that should make you wonder how sustainable this growth is. For one, these services are all fragmented. I don’t see that changing anytime soon – can you imagine iMessage and Microsoft’s Skype suddenly interconnecting?

Also, OTT services generally rely on users having a smartphone with a pricey mobile data plan. For many consumers (though not readers of this blog), that all-you-can-text package may seem like a better option. And smartphones remain outnumbered by featurephones 5:1 worldwide.

Also, the use of mainstream IP networks by OTT players can leave them more vulnerable to outages and delayed messages than SMS.

Finally, while these services are free, some – namely Twitter and WhatsApp – will need to figure out a way to make money. Starting to charge consumers could cause a sudden halt or reversal in their popularity.

Even if SMS is no longer dominant half a decade from now, it will still probably the largest player. Informa, for instance, thinks SMS traffic will grow 60% between 2011-2016, and hold 42% of the market.

Bottom line: Companies thinking about their marketing and communications strategies should consider SMS an important part of the mix for many years to come.