Apple’s iMessage Continues To Help Kill SMS Texting Around The World

Apple’s iMessage Continues To Help Kill SMS Texting Around The World

Finland is far from the minds of most iPhone users. However, the frigid, Nordic country is huge on carriers’ radar because it is there that text messaging was born and where it could very well die. The number of Christmas Eve texts in Finland fell off a cliff, plummeting to 8.9 million from 10.9 million in 2010. With text messages accounting for 20 percent of carrier revenue, its enough to give companies nightmares — but this bad dream is far from over.

Fortune reports on a troubling trend as countries first to adopt texting become the first to depart for the likes of iMessage, Twitter or email. In Hong Kong, Christmas Day texts fell 14 percent. Similar declines were experienced in the Netherlands and the Phillipines – all nations that quickly adopted SMS in the 1990s. But this is just the first wave of slowing use of lucrative cellular texting. U.S. carriers are expected to be slammed either this year or in 2013 as iMessage becomes a real alternative to texts.

U.S. carriers know they have a cash cow in texting, but appear to be taking a whistling-past-the-graveyard attitude toward the threat posed by iMessage. Texts piggyback along the same signal carriers use to deliver voice messaging. In the U.S. alone, texting is a $20 billion income source, Sanford C. Bernstein analyst Craig Moffett said. By charging 20 cents for each of the 2 trillion texts sent annually in the U.S., carriers enjoy a 4,096 percent markup, according to a University of Waterloo professor.

But providers such as Verizon take a “what, me worry?” stance toward iMessage, a service Apple introduced with iOS 5 allowing iPhone, iPod touch and iPad owners to send free texts, pictures and data to other iOS users. After all, “customers still need a data plan to connect to a device. They are only making a choice on how they are using the data,” a Verizon spokesman recently told the New York Times.

Really, now?

While that may hold true for iPhone owners requiring a 3G connection, the carrier apparently did not read our piece on most tablet owners opting for Wi-Fi connections, rather than costly cellular network links. Indeed, a study found 95 percent of iPads and other tablets use Wi-Fi instead of cellular providers — and there’s no sign of going back.

Then there is talk of iMessage moving to Macs, opening millions more devices to the option to desert texting. Along the way, why not throw iChat into the mix? The application once limited to Macs could cross-pollinate all devices, becoming part of Apple’s iOS mobile software. The haven of “they have to buy a data plan” to text quickly crumbles.

And while we love Apple, the Cupertino, Calif. company is not alone in noticing consumers are avoiding SMS like the plague. Google is also working on an iMessage alternative, as well as Facebook, clearly in an attempt to further engage its mammoth user base.

First carriers tried charging for voice calls, then consumers found VoIP. Then carriers began giving voice calling away, but charging for texts. Now that texts are nearing the end of their shelf life, carriers have a death grip on data plans.

Carriers? Meet Slippery Slope.

Related
  • FriarNurgle

    Carriers will just compensate with new fees and/or new service plan pricing in the near future.  

  • joewaylo

    The very least, carriers will earn money over data usage when it hops very high. Depending on the user of course, if they are iMessaging 100s of texts and photos/videos a day it can cost a gigabyte or more not including the frequent usage of the iPhone like through Siri.

    Then sooner or later Google and Apple may partner and open the flood gates to Android users. Of course that won’t happen as they prefer Google Chat/Voice.

  • Aj Tk427

    wow, you’d have to be doing a shit load of texting to even dent a gig.  I mean unless you’re sending a video/pic every time you text.

    Text only messages are paltry amounts of data (which is why everyone complains about the cost of them) sure if you’re sending 100s of images or videos that’s going to happen but that’s not a majority of people.

    The carriers are worried about this. Txt plans are cash cows for the carriers, i.e. you currently would have a data plan and a txt plan, not anymore just data.

  • Munas

    iMessage sometimes works not exactly I expect it to work. My wife has an Adroid phone and an iPod. When I tell (i.e. Siri) to send a text message to my wife, it is sent to an iPod, which is in her purse in stead of being sent as an SMS to her phone.

  • Oskar Sørensen

    The Scandinavian country Denmark where I reside is tiny, but Finland is about the size of Germany and therefore not tiny at all.

  • DarylFritz

    I assume the author was referring to population. Finland ranks lower than Germany, and even Denmark.

  • dannywsu

    I personally think the reduction in texting is simply just-deserves for the cellular companies.  Cellular companies have been gouging customers on texting fees for years now.  There is NO WAY that 1 text costs $0.45 but that is a normal charge for an overage and texting packages costing 30-40% of a bill is just ridiculous!

    The way I see it, a text takes up the least amount of bandwidth of all of the services a celluar company provides and therefore should also cost the least.

    Can iMessage be expanded to Android, Windows Phone and other devices?  iMessage here I come!

  • danygoel

    TxtImpact Multimedia Messaging Service (MMS) is an end-to-end solution enabling businesess to deliver a rich MMS experience to customers. You can now combine text, pictures, photos, animations, speech and audio for the ultimate messaging experience.
    http://www.txtimpact.com/mms-m

  • Al

    Indeed.

    Finland = 5 million
    Denmark = 5.5 million
    Germany = 81 million

    Amazing that “little” Finland has such a big impact upon the world. Great country, such intelligent people, and very reserved.

  • timoftelaur

    My friend was working on apple and he changed his profession and life build career because he discovered the best method to get a iphone for free. Each problem which I have with iPhone it’s finished for me because my friend Tony helps me.
    After he told me the best method to get a free iPhone 4S, it always helps me with all sorts of questions I have. This is his job and I appreciate very much his website free-us-iphone.com .
    I hope that he will help you with your all questions. It is an amazing man. All my family got free iPhone 4s . It’s a user proof category there if you don`t believe me. This man is my idol

  • gun2hd

    Google uses talk. 

  • vikassaraswat

    Do yourself a favor, buy her a iPhone.
    Will you. I message don’t like android.

  • First Last

    I wish people would venture out of the apple product box and use other products that offered this functionality. Google Voice has offered text, SMS communication for free and well before iMessage on iOS 5 came out. Someone with a data plan could eliminate their texting costs from their provider and use the google voice application instead. I’ve saved $10 a month for the past 2 years now!

  • David Walker

    I have an alternative theory. The drop in texting seems to correspond very nicely with the shift from “dumb” phones to smart phones. It seems to me that smart phone users see texting as a primitive activity and have opted for email and social networking instead.

    This is supported when you consider how many users BlackBerry has lost in the past year. At least some of the messages previously sent via BBM should have switched to SMS when the users moved to another phone platform, but the data says otherwise. People who are used to BBM apparently aren’t willing to settle for SMS as a replacement.

    I don’t accept that texting represents such a huge percentage of carrier income. The Canadian carriers all offer lots of free texts and packages with unlimited texting for nominally more than packages with a limit on texts.

    I think the continued success of carriers comes from the tying of packages to subsidized smart phones. The only way to avoid having to pay full price for an unlocked phone is to commit to a minimum term length and a minimum dollar amount per month. If you opt to pay full price for an unlocked smart phone you pay the same price per month as those with subsidized phones. That leads almost all smart phone users to lock in for 3 years – Canada, home of the longest phone contracts in the world :(

    Dumb phone users can usually pick the number of minutes and texts they want, but only if they pay full price for the phone.

  • mikells43

    but thats such a pain in the ass having to give out a diff number for people to text you on. id just rather pay the 10$ lol.

  • Demonstr8r

    While I don’t use Facebook, and likely never will, Facebook Messenger for the desktop, iPhone, iPad and Android devices should have a significant impact on SMS as well. It’s still too early to tell, but Google+ Messenger may have a similar impact on SMS in 2012, unless the Myan predictions hold true.

  • Michael Robinson

    I have a very hard time believing this actually causes a revenue drop. I don’t think I know a SINGLE person anymore who doesn’t have unlimited texting in their cell plan. So the carriers are getting their $15 or $20 a month for the unlimited texting plan, and iMessage just means that they have fewer texts to deliver. (I’m not exaggerating that I don’t know a single person who doesn’t have unlimited texting… YEARS ago it became much more affordable to do so.)

  • prometheus1981

    The only fallback of the iMessages is that it eats all of your data, at least that has been my experience. My wife has the 2GB plan with her 3GS and since iOS 5 I have noticed that her data allowance lasts for about 2 weeks and her battery is constantly draining in about an hour. I took the phone to the Apple store and they ran some tests on the battery but found that it was working as it should and recommended me to un-install and restore the phone. I restored the phone without restoring the backup and set the phone back up with no extra apps and the problems persevered. When I disabled iMessages the battery is back to normal and the data allowance is hardly getting dented. Until Apple fixes these issues I won’t be able to enjoy iMessages.

  • azidops

    Wow, $0.45 in the USA? In Norway it costs something like $0.06 per text. You have to look back to around ’95 to find prices like $0.45 for texting in Norway

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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