Within the last year, there has been a huge shift in mobile messaging markets. One of the biggest themes being discussed in the USD 202 billion mobile messaging industry is this issue of 'the end of SMS' and the booming rise of Over-the-Top (OTT) messaging services (or 'next generation' messaging services). But is the 'SMS doom' scenario accurate, and - in reality - is the feared cannibalisation actually happening?
OTT messaging traffic spiked from 2009 to 2010, and this volume growth continued on to hit 3.5 trillion messages in 2011. With the ever increasing uptake of smartphones and mobile data services, the company forecasts this growth to continue at a CAGR of 42.2% and reach 20.3 trillion by end-2016 - a staggering number which Portio believes is still extremely conservative.
However, this forecast does not mean that OTT messaging is expected to cannibalise over 20 trillion text messages. Portio Research sees OTT and SMS traffic growing side by side, synergistically, as the overall volume of mobile P2P messaging increases dramatically. It seems OTT may effectively slow down the growth of SMS over the next few years, but little 'cannibalisation' will occur in the short term.
The company's new Mobile Messaging Futures 2012-2016 report offers detailed context and explanations to our messaging findings. Context that will help dispel the hype that permeates media reports, and explanations that will cut through the industry's misunderstanding about how OTT services are being used, and how popular they are.
Portio believes that as more new messaging mediums become available, so consumers adopt the new ways alongside the old ways and communicate more and more. Portio spoke to a number of key messaging industry players while researching this report, and most broadly agreed that OTT services are not 'instant SMS killers'. Most vendors concur that OTT services do provide a threat to SMS, but most also agree that this threat is not as immediate as many press stories would have us believe.
Portio notes that SMS remains the global industry standard - any handset, any network, any country, any OS, any time, any place, any person. It still meets all needs - easy, cheap, a high degree of utility, discreet, simple, quick, etc. Moreover, it is still simple; almost anyone can figure out how to send and receive a simple text, as no complex configuration, download, registration or installation is required.
According to the company, despite the rapidly rising use of OTT services, SMS will continue to be the fall-back of choice for many years to come. A service such as Apple iMessage only works between two iOS 5 enabled devices, but under any other circumstance, the message defaults back to trusty old SMS. By end-2016 there will be approximately 8 billion SMS-capable mobile handsets in use around the planet, and it will take another decade yet for those devices to fall out of use.
Furthermore, the company sees SMS and OTT services as being inextricably linked. Currently while users are adopting OTT services, they are learning to text even more; far from reducing the texting habit, OTT services are encouraging it and growing the habit. The average mobile subscriber is now sending more messages and while SMS growth is 'getting its wings clipped' in certain markets, the growth of these OTT services is not necessarily a story of doom and gloom for MNOs.
Clearly OTT services are a significant new category, with lots of growth ahead. However, for the foreseeable future, Portio Research believes they still do not pose a significant threat to SMS at a worldwide level.
Fevered interest about SMS and OTT is understandable and relevant, but it is only one element of a wider evolving messaging story.
MMS, launched after the initial success of SMS to deliver multimedia content, has - until recently - been the second greatest revenue generating non-voice service. While MMS will be amassing revenue exceeding USD 250 billion in the period 2009-2016, it is facing stiff competition from the comparatively new services - such as mobile e-mail and mobile IM.
In fact, in 2011, mobile e-mail revenue surpassed MMS revenues, and mobile IM - although presently contributing less in terms of revenue compared to SMS, MMS and mobile e-mail - will out-perform MMS in revenue-terms by end-2016.
This expansive sixth edition in our hugely popular messaging series, Mobile Messaging Futures 2012-2016, continues to provide the most detailed and in depth discussion of all mobile messaging technologies. This new edition - covering SMS, OTT, mobile e-mail, mobile IM, SMS hubbing, mobile marketing and advertising, and more - is one of the most detailed and popular reports ever written on the worldwide mobile messaging market.
For further information about this detailed new market report e-mail: moc.hcraeseroitrop@ofni or call +44 (0) 1249 656964
Portio Research Ltd is an independent UK-based research company, specialising in the mobile and wireless sector. Portio is focused on providing high quality, data-centric reports based on hard facts and proven numbers, rather than hype and speculation. www.portioresearch.com
