Mobile Messaging Futures
Many in the mobile industry feel that MMS, mobile
email and mobile IM have somehow failed as messaging
platforms and that SMS, though it seems to pain people
to admit it, is the only truly successful mass market
messaging format. However, this is not the case, while
SMS is a truly staggering mass market phenomenon, these
other messaging formats have not failed, they have simply
failed to match up to the runaway success of SMS.
For some reason SMS has become a ‘dirty word’
for some people, analysts don’t like to talk about
it, mobile operators don’t like to focus on it,
and no-one treats SMS like it’s sexy any more.
It’s as though SMS is “old” technology,
as if it no longer deserves any credit, it should be
consigned to the history books. This is crazy. Worldwide,
SMS still accounts for approximately 75 to 80% of all
non-voice service revenues, SMS traffic volumes are
still growing at a breath taking pace and as worldwide
subscriber numbers climb from 2.5 Bn to 4.5 Bn over
the next 5 or 6 years, SMS is the only non-voice service
likely to gain widespread acceptance among the majority
of these new mobile users.
Worldwide, SMS traffic hit 1 trillion messages in 2005,
and that figure is set to reach over 3 trillion by the
end of 2011. Set against that backdrop, of course other
messaging formats look small. But MMS has not failed;
worldwide MMS traffic touched 14 billion messages in
2005 and is forecast to pass 115 billion by the end
of 2011. These are not small numbers, and while they
are only a fraction of the volume that SMS has achieved,
MMS should still be seen as a great success.
So if MMS is a success, why has it not replaced SMS?
MMS has not failed, the industry had totally unrealistic
expectations of MMS in the first place. MMS was hyped
as the natural replacement for SMS, but that shows a
misunderstanding of SMS and the reasons why SMS has
been such a big hit worldwide. SMS owes its success
to its simplicity. It is the quickest, easiest and cheapest
way for two people to communicate a short and simple
message and as such it serves as an extremely useful
communications option that is affordable universally,
even among some of the lowest income groups of society.
MMS, on the other hand, has been misunderstood from
the start. MMS should be seen more as a mobile entertainment
service than as a messaging service. MMS is more complex
and expensive than SMS, so consumers are unlikely to
use MMS to communicate a simple message, when SMS does
the job so quickly and easily and costs so little. MMS
will always look like a failure when compared alongside
SMS, yet when you consider MMS in its own right, as
an entertainment application and content delivery tool,
then MMS can be seen as a very popular and successful
service.
Why has growth been so slow?
MMS struggled to gain ground between 2002 and 2004
primarily because the service was not fully supported
and the necessary equipment was not in widespread circulation.
At the time of launch, MMS-enabled handsets, with GPRS
support, colour screen and camera included, were comparatively
expensive, and many networks launched services amid
an array of complex tariffs. MMS was often charged according
to the size of the message (per-KB) which left end-users
confused about costs and created the perception that
picture messaging was expensive.
Further problems were caused by a lack of standardisation
among handset vendors, leaving screen display for MMS
messages unreliable, and a lack of signed interoperability
agreements between network operators further hampered
the potential growth of MMS services. Add all this together
and throw in a complex user interface and it is hardly
surprising MMS got off to such a slow start. The industry
failed to understand that until the penetration level
of MMS-capable handsets reached a certain critical mass,
widespread use of the service was never going to happen.
Only now is MMS growing in popularity since all networks
are fully interoperable, colour-screen cameraphones
are in widespread circulation and MMS tariffs are now
cheap and transparent. Compare this to SMS: worldwide
there are approximately 2 BILLION SMS enabled handsets
in operation, it’s cheap and easy to use, widely
supported in almost every corner of the mobile world
and there are hundreds, perhaps thousands, of services
and applications that utilise SMS as a communication
medium. That is why SMS is so popular, and why MMS has
taken so long to take off.
What about mobile email?
Once we understand this argument, we can put mobile
email into perspective. Set against an installed base
of 2 billion plus SMS-capable handsets, mobile email
has only just got off the starting blocks. RIM’s
BlackBerry is widely accepted as the market leading
device of choice for corporate executives who need reliable
mobile email, yet after years of pushing these excellent
devices into the market, the installed base of BlackBerry
subscribers, worldwide, in mid-2006, reached only a
little over 6 million. Taken alone, 6 million or more
is a great success for RIM, but compared to the 2 billion
souls around the world with SMS in the palm of their
hands, it’s just a drop in the ocean.
Looking forward perhaps 10 or 15 years, we should
see a future where email becomes the unchallenged #1
most popular form of non-verbal communication on the
planet. With billions of people connected to the Internet,
wired and wireless, email will surely be the messaging
format that most people use, but this is unlikely to
be a conscious decision on the part of the consumer.
By this time, how an individual is connected to the
Internet, and which messaging platform they are using
won’t matter – and the user will neither
know nor care how it all works. Messages – text
or images, moving or still, with or without attachments,
sound, colour, etc - will be sent and received by any
device, any time, any place, with or without wires,
and telecommunications service providers, if they are
smart, will not burden consumers by even trying to explain
how it all works.
But getting us to that vision of the future from where
we are now will take some time, and there will doubtless
be some barriers to cross along the way. To move towards
a point where mobile email becomes the mass market messaging
format of choice will require absolutely seamless integration
of competing technological standards, in an industry
that so far has a poor track record on standardisation.
For mobile email to start reaching deep into the mass
market we need widespread penetration of email-enabled
devices, we need to see simple, transparent pricing
and we clearly need effortless interoperability between
telecoms operators, not only mobile network operators
but also wireline operators and the broader Internet
community as a whole.
So it may be a while before consumers all use mobile
email, but what about the enterprise sector?
In the short term, mobile email solutions such as
BlackBerry will remain popular tools with company executives,
and many operators around the world are promoting their
own email solutions, and this should slowly help the
sector to grow. But as we learned from MMS, it takes
a long time for handset penetration to build a critical
mass of users, and a long time for a service to penetrate
the consumer masses who are more price-sensitive than
corporate users.
Further hampering the take up of mobile email in the
enterprise environment, corporate IT departments are
unclear about how to integrate mobility in the broader
world of the corporate IT infrastructure. Should mobility
be bought with other IT and telecom services from long
standing, trusted suppliers, or separately, directly
from the network? Should corporations equip large sections
of the workforce with mobile devices, possibly costing
a hefty slice of the IT budget, or can companies tap
into the devices these individuals already own? If using
their own devices, who should pay the bill and how does
the corporation control network security? Corporations
are understandably concerned about making these decisions,
and so far no clear precedent has been set.
Again this presents an opportunity for SMS, and a problem
for mobile email. While big companies can afford complete
mobility solutions, for many small and medium sized
enterprises that simply is not an option. In mature
markets such as Europe and North America, the vast majority
of employees already have an SMS-enabled device in their
pockets. Solutions are available to offer some email
functionality to SMS, such as copy, back-up, archive,
forward, auto-divert, out-of-office reply and so on.
If enterprises could buy into these solutions from network
operators at a fraction of the cost of replacing all
those handsets, many SMEs might find that SMS has an
affordable place in the corporate communications infrastructure,
at least for a few years while the industry hammers
out the technical barriers to cheap, widespread mobile
email for all.
So mobile email has a strong future, but it would
be a mistake to expect it to replace SMS for many years
yet, probably the best part of a decade. Mobile email
will continue to grow year-on-year and big corporations
will start deploying large scale mobile email solutions
as time goes by, but mobile email for the consumer mass
market remains some years away. Hundreds of millions
of email-enabled devices need to penetrate the market
first, alongside cheap and easy-to-use services, and
technical issues around standardisation need to be ironed
out before they have a chance to put people off. Remember
‘you never get a second chance to make a good
first impression’.
And where does that leave mobile IM?
Yet again we find it’s pretty much the same story
for mobile IM, plus or minus a few subtle differences.
Again mobile IM requires market maturity to make a big
impression on the messaging industry globally. Hundreds
of millions of IM-enabled handsets need to penetrate
the market, interoperability agreements need to be in
place and operators need to work together to ensure
standardisation and the removal of technical barriers.
Much of the promise around mobile IM lies in the argument
that hundreds of millions of individuals already use
IM services on their PCs, and these people are likely
to switch effortlessly to using IM on their mobile handsets
instead.
While this may eventually happen, this theory relies
on a number of factors. For one, maybe these people
use IM on their PCs because they sit in front of a PC
all day anyway, so that’s unlikely to change.
Secondly, IM on the mobile handset needs to be a perfect
replica of the desktop experience, or better, in order
to attract users away from a cheap wireline broadband
connection to a more expensive wireless connection.
Facilitating this experience will mean network operators,
handset vendors and IM heavyweights such as AOL, Yahoo
and MSN working closely together to ensure standardisation
of handset display configuration and so on. Finally,
true IM requires presence awareness in order to function
as it does in the desktop environment. For operators
worldwide to deploy fully IMPS (Instant Messaging and
Presence Services) compliant IM services and have those
service fully interoperable around the globe will take
some time, and until that happens, without presence
awareness, IM offers little more utility to end users
than good old SMS, which everyone already has and already
knows how to use.
As markets move forwards mobile IM is likely to gain
increasing popularity in certain countries, such as
the US and some big Asian nations, where desktop IM
is already popular. For hardcore users IM is likely
to be cheaper than SMS, but in strong SMS markets, such
as Europe, operators will keep SMS prices low and IM
prices less competitive. Cannibalisation will inevitably
happen at some stage, once all-IP based networks penetrate
the mass market and IMPS improves the functionality
of IM, but until then SMS is likely to continue to wear
the crown.
Disclaimer:
Portio Research Limited.
Published 2007 by Portio Research Limited. © Copyright
2007.
www.portioresearch.com
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