Messaging apps: Lots of noise but profits aren't much to talk about

Messaging apps: Lots of noise but profits aren't much to talk about

Summary: While instant messaging apps will account for more than 75 percent of all mobile messaging traffic by 2018, they will only deliver about 2 percent of the sector's revenue.

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Talk's still cheap.

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A new report from Juniper Research finds that while mobile users will send more than 63 trillion messages a year by 2018 – roughly 75 percent of all mobile traffic – instant messaging apps will only generate about $3 billion in revenue, or 2 percent of the entire mobile messaging sector's sales.

Because IM users routinely send up to 10 different chat missives to convey the information contained within one SMS message, mobile traffic will continue to skyrocket as mobile messaging providers such as WhatsApp, Tango and WeChat play around with new pricing models and seek out new ways to monetize their services and platforms.

"Adoption of IM apps has rapidly accelerated over the past 18 months, something which has led (us) to revise upwards our forecast for the volume of IM traffic," Juniper's Sian Rowlands said in the report.

This disparity between usage and revenue is even more pronounced because hardcore IM users tend to skew young and agnostic, downloading multiple mobile chat apps to their smartphones and bouncing between providers on a daily, if not hourly, basis.

The report notes that pure IM app vendors are trying just about anything to generate revenue including in-app purchases and games or incorporating mobile ads and subscriptions while Facebook is using its Messenger service primarily as a conduit to other money-generating applications.

Asia – China in particular – will generate the most traffic across mobile messaging platforms over the next four years and mobile operators are ramping up their development on the Rich Communications Suite initiative.

Topics: Mobility, Apps, Social Enterprise

About

Larry Barrett is a freelance journalist and blogger who has covered the information technology and business sectors for more than 15 years.

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