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Apple's free iMessage expected to undermine carriers' high-profit SMS business

post #1 of 139
Thread Starter 
Apples upcoming free messaging application iMessage in iOS 5 will likely disrupt wireless carriers thriving SMS texting business when it arrives on Tuesday, according to multiple analysts.

iMessage, a new app launching as part of iOS 5, will offer iPhone, iPad and iPod touch owners unlimited free messaging over Wi-Fi and 3G networks.

The New York Times reports that the forthcoming service is being perceived as a threat to mobile operators. iMessage and other similar services will allow smartphone users to rely on existing data plans and Internet service for text messaging functionality, thereby avoiding having to pay for high-margin SMS plans from wireless operators.

SMS A multi-billion-dollar business in the U.S.

An SMS message offers the user the ability of sending short bursts of text of up to 160 characters. Report author Jenna Wortham noted that, at rates as high as 20 cents per sent and received message, a user would end up paying $1,500 to send 1MB of text data. The same amount of data costs just 1.25 cents on a $25 per month 2GB data plan.

Two trillion text messages are sent in the U.S. each year, according to Sanford C. Bernstein analyst Craig Moffett. That translates into $20 billion in revenue each year, with $7 billion a year taken in by Verizon alone.

One expert estimates that a single text message costs carriers just a third of a penny. University of Waterloo professor Srinivasan Keshav told the publication that SMS messages use the same network carriers employ for voice calls, piggybacking on the phone railway, with as much as "4,090 percent markup" for the service.

In the Netherlands, free messaging apps and social networks have already shrunk texting traffic and eroded profits, Wortham said. However, the report noted that some carriers are adapting to the imminent potential threat coming from Apples iMessage.



AT&T now offer its subscribers two choices, a $20 per month unlimited text plan or a flat 20-cent fee per sent and received message. The carrier's previous plan of $10 per month for 1,000 text messages is no longer available.

For its part, Verizon sees iMessage as a complementary feature to other communication standards. From a business perspective, customers still need a data plan to connect to a device. They are only making choices on how they are using the data, a company spokesman was reported as saying.

However, Apple devices only account for 5 percent of texting traffic each year, mobile analyst Chetan Sharma told the publication. Considering that iMessage is an iOS-only application right now, users will still require a texting plan to connect to mobile subscribers that do not own a supported iOS device.



iMessage How it works

The application is part of iOS 5, the companys latest mobile platform version which will be released on Oct. 12. iOS 5 will be compatible with various iOS devices: iPhone 3GS, iPhone 4, iPhone 4S, iPad, iPad 2 and third-generation and newer iPod touch models.

iMessage was unveiled at this years Worldwide Developer Conference in June at what turned out to be the last keynote the late Steve Jobs delivered. One report suggested that Apples carrier partners were unaware of the development of such an app, reportedly finding out about it at the same time as the general public.

The app will make instant text-messaging between iOS devices substantially cheaper, even free in some cases, as it only requires a wireless network or a 3G data plan to work. The service should draw special appreciation from users that send a significant amount of SMS messages to friends and family that live in other countries and also happen to own recent models of Apple's mobile offerings.

Unlike SMS messages, iMessage texts are not limited to 160 characters per message. In addition to text, the application lets users share photos, videos, locations and contacts. Also, all sent and received iMessages are securely encrypted.

The app supports multi-device use, so users can pick up chatting with their contacts across any of the iOS devices they own. iMessage features single and group messaging and offers text delivery notifications.

A recent code discovery in Apples iChat application suggests the company may be interested in bringing iMessage support to its OS X Lion chatting platform.




Similar solutions from Apple rivals

iMessage has been seen as Apples answer to Research in Motions popular BBM messaging application that lets BlackBerry users instant message each other. Until the introduction of iMessage, BBM was considered an exclusive major smartphone feature that would draw some mobile consumers to BlackBerry devices and turn them into loyal brand followers.

Samsung and Google are also reportedly working on similar services that would allow Android users to communicate via free messages instead of pricier SMS texts. Meanwhile, Microsoft is said to be readying its own instant messaging system for the Windows Phone platform.

Other third parties offer free instant messaging clients for most smartphone platforms including iOS, but they are not natively integrated into the operating system and need to be downloaded from the appropriate application store.
post #2 of 139
They already have eliminated the data plan so I don't believe any of them will be hurting by this.
post #3 of 139
I like iMessage very much, but it has one disadvantage: its not cross platform.
Thats why i will stick to Whatsapp which is cross platform compatible.
So I can send my messages to (almost) everybody.
BTW: iMessage is really a feature copy of Whatsapp. So no innovation on Apples side here....
I fear iMessage will be like iChat: great app but not really mainstream due to the fact its bound to the Apple platform only.
post #4 of 139
Quote:
Originally Posted by AppleInsider View Post

Report author Jenna Wortham noted that, at rates as high as 20 cents per sent and received message, a user would end up paying $1,500 to send 1MB of text data. The same amount of data costs just $1.25 on a $25 per month 2GB data plan.

2GB = 2048MB ÷ $25.00 = $0.0122 or 1.2¢ per 1MB data.
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post #5 of 139
A lot of Blackberry users are running away from RIM. They know that they're on a dead end platform with no future, so they have to make a choice and quite a few of them are ending up on iOS. And especially since Apple has their own message system now, it will be yet another incentive for these people to finally make the jump, because their ship is sinking fast, and they know it too.
post #6 of 139
Quote:
Originally Posted by lordoftheflatbush View Post

I like iMessage very much, but it has one disadvantage: its not cross platform.
Thats why i will stick to Whatsapp which is cross platform compatible.
So I can send my messages to (almost) everybody.
BTW: iMessage is really a feature copy of Whatsapp. So no innovation on Apples side here....
I fear iMessage will be like iChat: great app but not really mainstream due to the fact its bound to the Apple platform only.

You'll still be able to send SMS messages to non-iPhone users.

And given that over 250 million iOS devices have been sold (not shipped) I'm sure you'll find a person or two you know who have one.

Unless of course you don't have one...

But you do

And Whatsapp is probably a copy of Blackberry messaging so no innovation on Whatsapp's side there either.

post #7 of 139
Quote:
Originally Posted by solipsism View Post

2GB = 2048MB ÷ $25.00 = $0.0122 or 1.2¢ per 1MB data.

Fixed. Thanks for catching that.
post #8 of 139
Everyone but two persons in my loop has an iOS Device.
post #9 of 139
Quote:
Originally Posted by lordoftheflatbush View Post

I fear iMessage will be like iChat: great app but not really mainstream due to the fact its bound to the Apple platform only.

iChat is completely mainstream: my friends using AIM, Google Talk, etc. all message me on it and vice versa. They have no idea whether I’m using iChat or some other client, and I have no idea what client they’re using. It’s seamless, open, and not Apple-bound at all.

Similarly, iMessage isn’t an app at all—it’s an automatic capability of the iPhone’s built-in SMS app (“Messages.”) Like iChat, it's seamless: you don’t have to remember who has an iOS device—just send your texts! When you text with an iOS friend, the message is blue and free. When you text with a non-iOS friend, the message is green (for the money you lose) and you get gouged.

I refuse to pay for a texting plan. It’s archaic, and it’s greedy, when I’m already paying for data and the SMS service costs the carrier close to nothing!

So if it’s not some emergency, my non-iOS friends can learn to use their voices Or email/IM me (I like Meebo as an iChat substitute). Or they can even text to my AIM/iChat account (comes to me through Meebo) and I can reply for free! That has always worked, even if it’s awkward.
post #10 of 139
Quote:
Originally Posted by AppleInsider View Post

In the Netherlands, free messaging apps and social networks have already shrunk texting traffic and eroded profits, Wortham said. However, the report noted that some carriers are adapting to the imminent potential threat coming from Apples iMessage.

Well, I live in the Netherlands, and I can tell you: the vast majority of my friends use Whatsapp, instead of text messaging. My bundle consists of 500 SMS p/m, but I hardly get to 25-30 a month.
post #11 of 139
I hear AOL, Yahoo, Google and others are already about to copy apple with "instant messengers" of their own. Apple needs to sue them quickly before someone steals their idea again.
post #12 of 139
... but there is only one thing I want to know that I have not been able to find:

Will there be. A god**mn. Individual timestamp. For messages.

This is my chief, top, primary, first complaint about the current messaging.

I do not care what Apple thinks about how people converse.

I should not have to jailbreak an Apple device in 2011 to have this feature.
post #13 of 139
SMS is more expensive per message sent but data plans costs a lot more per month so average phone bills are going up; I therefore doubt carriers are complaining that much.
post #14 of 139
How does this work? Let say I have an iPhone without text plan but with data plan. Will iMessage be smart enough to use the data connectivity by default?
post #15 of 139
Our family has 5 lines on AT&T. We lowered the plan to 700 min. Between 5 lines, i know that sounds too little, but we also added $30 unlimited texting which covers all 5 lines ($6 per line for unlimited texting), but the kicker is that you get unlimited mobile minutes from ANY carriers.
Most people use mobile phones now days, so I thought this would be a good plan. What do you guys think?

I guess this is one way for carriers (in this case AT&T) to lure customer to texting plan.
post #16 of 139
Quote:
Originally Posted by pika2000 View Post

How does this work? Let say I have an iPhone without text plan but with data plan. Will iMessage be smart enough to use the data connectivity by default?

In Settings » Messages there is an option to disable iMessages, MMS, and other options, but no blanket disabling of iMessages.

However, in the Messages app if you have iMessages enabled it will be the default option and clarly labeled as iMessages and have a blue Send button. If that fails for whatever reason you will then get an option to send via SMS and it will say Text Message and have a green Send button.

I don't think you'll have trouble keeping yourself SMS free.
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post #17 of 139
My wife and I only use Whatsapp and KakaoTalk nowadays. I even cancelled our AT&T texting plan and requested an sms block so we would not be charged for spam texts and texts that other people send. You know, the ones who refuse to use free apps like KakaoTalk to txt from their smartphones... That's how we communicate with friends and family here in the US and abroad, and we're glad the carriers are sucking a little less of our money every month
post #18 of 139
Quote:
Originally Posted by Sarcasmo48 View Post

... but there is only one thing I want to know that I have not been able to find:

Will there be. A god**mn. Individual timestamp. For messages.

This is my chief, top, primary, first complaint about the current messaging.

I do not care what Apple thinks about how people converse.

I should not have to jailbreak an Apple device in 2011 to have this feature.

Nope, I have the iOS 5 GM installed, and no, it doesn't, I would really like this feature too, but we're gonna have to keep waiting unless you want to JB.
post #19 of 139
Quote:
Originally Posted by pika2000 View Post

How does this work? Let say I have an iPhone without text plan but with data plan. Will iMessage be smart enough to use the data connectivity by default?

Quote:
Originally Posted by solipsism View Post

In Settings » Messages there is an option to disable iMessages, MMS, and other options, but no blanket disabling of iMessages.

However, in the Messages app if you have iMessages enabled it will be the default option and clarly labeled as iMessages and have a blue Send button. If that fails for whatever reason you will then get an option to send via SMS and it will say Text Message and have a green Send button.

I don't think you'll have trouble keeping yourself SMS free.

Actually there is an option in the settings that says "Send As SMS" you can disable it, and it won't even try to send as an SMS.
post #20 of 139
Quote:
Originally Posted by lordoftheflatbush View Post

I like iMessage very much, but it has one disadvantage: its not cross platform.
Thats why i will stick to Whatsapp which is cross platform compatible.
So I can send my messages to (almost) everybody.
BTW: iMessage is really a feature copy of Whatsapp. So no innovation on Apples side here....
I fear iMessage will be like iChat: great app but not really mainstream due to the fact its bound to the Apple platform only.

It's all good mate. WhatsApp and iMessage away. Texting is so last century LOL.
post #21 of 139
Quote:
Originally Posted by AppleInsider View Post

Samsung and Google are also reportedly working on similar services that would allow Android users to communicate via free messages instead of pricier SMS texts. Meanwhile, Microsoft is said to be readying its own instant messaging system for the Windows Phone platform.

Does Android already have Google Chat built-in?


I don't know about Microsoft "readying its own instant messaging system". Windows Live Messenger is already available on multiple platforms and Windows Phone already has Windows Live Messenger and Facebook built into the messaging hub.

It doesn't look like Skype is there yet though.


I'm waiting for the inevitable buyout of WhatsApp. I wouldn't be surprised if a bidding war between Microsoft, Google and maybe even Amazon pushed the price into the many hundreds of millions.
post #22 of 139
Quote:
Originally Posted by gwlaw99 View Post

I hear AOL, Yahoo, Google and others are already about to copy apple with "instant messengers" of their own. Apple needs to sue them quickly before someone steals their idea again.

I see what you did there and I like it.

I got a kick out of this line from the article:

Quote:
Samsung and Google are also reportedly working on similar services that would allow Android users to communicate via free messages instead of pricier SMS texts.

Which Android has had since launch, in the form of Gtalk.
post #23 of 139
Quote:
Originally Posted by Firefly7475 View Post

Does Android already have Google Chat built-in?

Yes, it does.
post #24 of 139
Quote:
Originally Posted by gwlaw99 View Post

I hear AOL, Yahoo, Google and others are already about to copy apple with "instant messengers" of their own. Apple needs to sue them quickly before someone steals their idea again.

You mean the way they stole it from WhatsApp?

Christ, it's Xerox>Apple>Microsoft all over again.
post #25 of 139
In The Netherlands iChat is not mainstream at all. Most people use Skype for video calling. Again because its cross platform compatible. You don't have to think if the other person has Apple or not.
post #26 of 139
So Whatsapp should sue Apple for stealing their app
post #27 of 139
Quote:
Originally Posted by nagromme View Post

iChat is completely mainstream: my friends using AIM, Google Talk, etc. all message me on it and vice versa. They have no idea whether Im using iChat or some other client, and I have no idea what client theyre using. Its seamless, open, and not Apple-bound at all.

Similarly, iMessage isnt an app at allits an automatic capability of the iPhones built-in SMS app (Messages.) Like iChat, it's seamless: you dont have to remember who has an iOS devicejust send your texts! When you text with an iOS friend, the message is blue and free. When you text with a non-iOS friend, the message is green (for the money you lose) and you get gouged.

I refuse to pay for a texting plan. Its archaic, and its greedy, when Im already paying for data and the SMS service costs the carrier close to nothing!

So if its not some emergency, my non-iOS friends can learn to use their voices Or email/IM me (I like Meebo as an iChat substitute). Or they can even text to my AIM/iChat account (comes to me through Meebo) and I can reply for free! That has always worked, even if its awkward.

Why should I pay because Apple decided to build iMessenger only for Apple platforms???????
Whatsapp is free for every platform !!!!
post #28 of 139
Americans pay to RECEIVE messages??? That is completely outrageous! Anything that challenges this sort of rip off must be a good thing!
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post #29 of 139
Quote:
Originally Posted by Yuniverse View Post

Our family has 5 lines on AT&T. We lowered the plan to 700 min. Between 5 lines, i know that sounds too little, but we also added $30 unlimited texting which covers all 5 lines ($6 per line for unlimited texting), but the kicker is that you get unlimited mobile minutes from ANY carriers.
Most people use mobile phones now days, so I thought this would be a good plan. What do you guys think?

I guess this is one way for carriers (in this case AT&T) to lure customer to texting plan.

I just did the same thing. We were at 2100 minutes, but with unlimited nights and weekends, the A List, free AT&T mobile to mobile (now All mobile to mobile) we were hardly putting a dent in that limit. I figure even if we do go over during the holidays, the surplus of 13,000 rollover minutes we've racked up should keep us out of overage territory. Heck, in the last billing cycle, the total talk time for all 5 lines was something like 350 minutes, which just a few years ago wouldn't have been enough for even my wife's line. Text usage, on the other hand... yeah I don't even look at that anymore. Even though it's unlimited, it still blows me away just how many texts we rack up in a 30 day period.
post #30 of 139
How is this different than using the Google Voice app to send and receive all texts over 4G or WiFi to anyone you want, even those with just regular sms, regardless of what phone or carrier you or they have?

Oh, sorry, guess I answered my own question.
post #31 of 139
I put ios5 GM onto my friends iPhone and his girlfriends Verizon iPhone so that they can quickly and easily message each other. He lives in Scotland and she is in the US. So far they are loving it and it saves her a fortune. They had been using other program's like whatsapp but think this is much better and easier to use. They share messages pictures and videos with ease.

I have been using it for party chats with the wife and kids.
post #32 of 139
Quote:
Originally Posted by lordoftheflatbush View Post

Why should I pay because Apple decided to build iMessenger only for Apple platforms???????
Whatsapp is free for every platform !!!!

Except the iPad and iPod touch.
post #33 of 139
Quote:
Originally Posted by pmoeser View Post

You'll still be able to send SMS messages to non-iPhone users.

And given that over 250 million iOS devices have been sold (not shipped) I'm sure you'll find a person or two you know who have one.

Unless of course you don't have one...

But you do

And Whatsapp is probably a copy of Blackberry messaging so no innovation on Whatsapp's side there either.


The point is that you want to sent free text messages to non iOS devices and iMessage cannot do that.
Whatsapp is the best cross platform message app I have seen, it has an excellent user interface, its fast and provides excellent feedback. It is also seamless in use because it looks at the address book (if you allow that) and finds all phone numbers that already use whatsapp. So its perfectly integrated.
One thing it cannot do though: it cannot send messages to devices without a phone number, so the iPod touch (for example) cannot be reached. iMessage can do this and thats great but another very good message app pingchat is also able to do that.
Pingchat however isn't able to use one account on several devices (Whatsapp doesn't have this problem because its linked to a phone number) but newer versions of the app should be able to do that in the future.
One thing iMessage can do and non of the message apps I know of can, is resuming a conversation on another device. This is an excellent feature and thats why I'll use iMessage along with Whatsapp to be able to communicate with the rest of the world.

J.
post #34 of 139
There is a fundamental flaw in iMessage compared to WhatsApp. Having tested it for several months it is clear that you can not always be certain another iOS user will either have it enabled or if they do then they may not be in a 'data zone' (WiFi or 3G). In these scenarios you end up paying for the message. It's a nice idea from Apple but relies on an always connected world which isn't reality.
post #35 of 139
Can't wait to tomorrow evening!! (in UK) to install iOS 5 in our 2 iphones 4 and ipad2!! I hope iCloud works on Snow Leopard too...
Does anybody know the maximum size file/video/photo that you can send via iMessages? It must be capped to something, I guess.

Cheers.

God bless Steve
post #36 of 139
Whatsapp is the bomb (when it doesnt go offline that is). I've been using that for a while now and rarely send SMS anymore.

There's another new one called Pingme. UI is quite neat and it's FREE on iOS. It's also cross platform and requires a telephone number to register.
post #37 of 139
Quote:
Originally Posted by lukei View Post

There is a fundamental flaw in iMessage compared to WhatsApp. Having tested it for several months it is clear that you can not always be certain another iOS user will either have it enabled or if they do then they may not be in a 'data zone' (WiFi or 3G). In these scenarios you end up paying for the message. It's a nice idea from Apple but relies on an always connected world which isn't reality.

Note: When sending an iMessage to a compatible contact the send button is blue otherwise its green for SMS. Also, enable delivery receipts and you know that they have received the message pretty quickly after you sent it.

When sending an iMessage (blue send) if the other user is not in a data zone you get a message delivery failure. You can choose to send again (for 'free' with iMessage or choose to send as SMS. It doesn't fail then send it as an SMS without your consent.

You won't pay unless you choose to.
post #38 of 139
All carriers around the world are probably griping at this, but actually it's about time they innovate and give consumers better services rather than continue to thrive from this out-dated technology. For me, more than three quarter of the people I know own an iDevice, and those who own a Blackberry prefer BBM because WhatsApp server is so annoying slow some time, so maybe this will be a good chance for me to stop using WhatsApp forever.
post #39 of 139
I keep seeing this every time I open mail, just installed the new Mac OS 10.7.2

Possibly 'message' coming to Lion? Or just something I've missed? Someone may know something..

post #40 of 139
Most telcos in Australia offer plans with unlimited SMS already, and have done for a while. This is one way the telcos counter the free blackberry service and iMessage. Make SMS free. SMS is usually absorbed in the cost of the plan. Verizon have a sound strategy by the sound of the article, placing priority on just getting the user to subscribe to the network. You still pay the telco for network access, so losses in SMS revenue can be picked up elsewhere, or made up by just getting more subscribers.
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