What Will Messaging Look Like In 2020 and Beyond?

Messaging War Heats Up between Technology Giants, As Facebook Likely To Exit SMS

A messaging app will likely be the most valuable piece of technology in the world within the next decade. The question is, who will own it?

The value of messaging has been evident for some time. By 2015, messaging had surpassed social media as the most common activity on the mobile phone, the technology platform of choice for people worldwide. Increasingly so, our smart mobile devices should be called personal messengers, not phones. People don’t use these devices for calls, they use them primarily to message. With the messaging app effectively becoming the “portal” to the average smartphone user, it’s clear that whoever owns the primary messenger to the most users will become the most valuable company in the coming years.

Right now, WeChat appears to have succeeded in becoming the “everything app” of the East, but given Facebook’s renewed focus on messaging and Google’s push for RCS gaining steam, it appears the messaging landscape will soon become a battleground amongst technology giants.

The world of messaging going forward can largely be split into 3 domains.


(1) The first are over-the-top (OTT) messaging apps which include the world’s most popular apps such as Facebook’s WhatsApp and Messenger, and WeChat. Comparable OTT apps occupy geographic niches throughout the world. Apps/platforms like Slack (professional) and Discord (gaming) have their respective niches. In-app messaging on platforms like Instagram (owned by Facebook), Tinder, and other social networks can be consider as belonging to this domain. Increasingly, OTT apps have become end-to-end encrypted.

(2) SMS/MMS (and soon RCS), particularly on Android. This market is perhaps the most under-discussed in the last 5 years but with the largest potential to grow market share in coming years. SMS (short message service) and MMS (multimedia messaging service) are complementary protocols that currently govern text messages, and are transmitted through the telecom networks. Those using Android devices have the option to choose their own SMS/MMS service provider. SMS/MMS cannot be end-to-end encrypted. RCS (rich communication services) is the next generation replacement for SMS/MMS which Google, telecoms, and phone manufacturers are rallying behind as an answer to OTT messaging.

(3) Apple iMessage. Apple’s closed ecosystem for messaging means it owns a large portion of the messaging pie. The technology behind iMessage is a hybrid of (1) and (2). Apple phones make up 15% of the world’s smartphone market (closer to 50% in the US and more popular in “first world” countries) and doesn’t allow 3rd parties to access its iMessage messages.


FACEBOOK’S “MANIFESTO” ON MESSAGING = LIKELY NO SMS

Facebook’s Mark Zuckerberg brought some attention to these 3 markets in his “messaging manifesto” early this month. As the owner of several top OTT apps, Facebook, seemed to signal to the world that it wanted to dominate private messaging or (1) OTT messaging. But more interesting was his focus on privacy, which suggested a ceding of (2) SMS/MMS/RCS. Interestingly, Google has been limiting access to (2) on Androids through a Play Store policy change.

In October 2018, Google had announced limiting access to SMS/MMS, with a deadline of March 9 for apps that don’t require access as its main function to remove the request for it, at the risk of removal from the Play Store.

What has been missing from most analysis of Zuckerberg’s manifesto was the fact that Facebook’s Messenger app accesses SMS and MMS — and has been doing so since 2016. Basically, Messenger is a top player in (1), with its toes in (2). With the March 9 deadline now past, Facebook effectively risks removal of its app from the Play Store (which accounts for 70% of worldwide app downloads) unless it conforms to Google’s rule for accessing SMS/MMS on Androids.

The restriction states:

“You should only access Call Log or SMS permissions when your app falls within permitted uses and only to enable your app’s critical core functionality.

Core functionality is defined as the main purpose of the app. This may comprise of a set of core features, which must all be prominently documented and promoted in the app’s description. Without the core feature(s), the app is “broken” or rendered unusable.”

In Messenger’s current Play Store description, SMS isn’t prominently featured and only mentioned in the very last bullet, which makes it difficult to justify access to SMS/MMS as the “core functionality”, without which Messenger would be “broken” or “rendered unusable”.

With access to SMS and MMS permissions on Androids at stake, it seems a logical time to get behind the biggest distinguishing advantage of (1) OTT messaging over (2) SMS/MMS/RCS, namely the ability to end-to-end encrypt.

WhatsApp was already end-to-end encrypted and Instagram end-to-end encryption in transmission doesn’t mean much if Facebook is able to access user behavior on both ends. This leaves only Messenger and recent privacy scandals precipitated the proclamation by Zuckerberg that Messenger doesn’t use data from messages for advertising.

Viewed in this light, Facebook’s announcement this month seems less like a proactive manifesto for private messaging as much as a reactionary refocus given changes in the marketplace. With the public announcement, it seems very unlikely that Messenger will continue to include (2) unsecure/unencrypted SMS/MMS/RCS in its future messaging ecosystem.

IMPLICATIONS IN 2020 AND BEYOND

Arguably, the only reason OTT apps like WeChat and WhatsApp became so popular in certain countries were because of restrictions and costs of SMS, e.g. challenge of international texting and lack of modern messaging functionality. With RCS, the next generation of SMS, potentially solving these problems, consumers will have fewer reasons to use OTT apps, aside from privacy.

Apple’s iMessage has already demonstrated the power of pre-installing a messaging app that enables all the modern messaging features in preventing the need for OTT apps. With Google, telecoms and carriers, banding together to carve out their messaging dominance on Android — as Apple did on iOS — Facebook’s OTT slice stands to potentially shrink without a unified effort and strategy.

As we look to the rest of 2019 and beyond, we can expect the messaging war to heat up and more frequent messaging-related initiatives and announcements. As is stands, the market looks to be split into the 3 fiefdoms each increasingly controlled by the largest technology companies, who will jostle to grow their share of the pie.

Most of the major telecoms in the US have already announced the rollout of RCS this year. Developments in a range of topics such 5G, net neutrality, privacy and security legislation, anti-trust efforts and service reliability (e.g. Facebook’s recent outages) are all factors that will help shape the market, as will messaging innovation. As this landscape evolves, our company will focus on providing innovation so that the most important player in the messaging war, the user, wins.

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