The Text Message Is Dying. Who Will Rule the Future?

Researcher Informa published a report which estimates an astounding 17.6 billion SMS texts are sent each day. Yet, in spite of those eye-popping figures that follow a decade of tremendous growth, SMS texting's best days are probably behind it. In 2012, chat apps such as as iMessage and WhatsApp sent over 19 billion messages per day, besting SMS for the first time. By next year, chat app use is expected to rise to 50 billion messages per day while SMS budges forward to 21 billion messages a day, supported by mobile users without data plans.

In the video below, senior technology analyst Eric Bleeker discusses how smartphones are liberating wireless users from costly SMS text plans. Mobile companies see over $115 billion per year in high-margin fees from SMS messages. But texts taking up almost no data and smartphones with apps capable of sending messages now in ubiquitous use, the future of SMS was bound to diminish once chat apps established critical mass. With Apple unveiling iMessage for Apple products, Facebook putting more resources behind Messenger, and the emergence of WhatsApp, plenty of messaging platforms have gained in popularity across the past year.

SMS is facing a classic case of technological disruption, and the winners of the next generation have a different way of profiting from the messages: Instead of making money per each message sent, they view messaging apps as a way to keep users engaged on their platforms. To see Eric's full thoughts, watch the video below.

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Eric Bleeker, CFA has no position in any stocks mentioned. The Motley Fool recommends Apple and Facebook. The Motley Fool owns shares of Apple and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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