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The iMessage Benefit: Up to $400 Million in SMS Cost Savings Daily



In its earnings call, Apple had announced that its popular iMessage messaging service has been quite the success, transferring over 2 billion messages daily to over 500 million iOS devices. iMessage can be sent between iPhone, iPad, iPod Touch, and Mac devices. The service, which replaces traditional text (SMS) and multimedia messages (MMS) for many iOS users, could have an impact on the larger ecosystem as it would save users up to $400 million daily in text messaging costs every day if those users paid a la carte for each message sent or received at today’s carrier rate of $0.20 per SMS or MMS.

Messages that are sent via iMessage’s systems are delivered as data–and will count against your monthly data bucket–rather than as text messages.

However, that cost savings may be lower in real life as a number of iPhone users would have a monthly text messaging plan that either offers a fixed number of messages for a set monthly fee or unlimited messages for a set charge. Carriers like Sprint Nextel bundle unlimited text messaging into their plans and Verizon’s and AT&T’s switch to plans that allow multiple devices to share voice minutes and data buckets also bundle unlimited SMS so likely new contract customers on AT&T Mobility’s Mobile Share Plan or Verizon Wireless’ Share Everything Plan would not have to pay the $0.20 per SMS or MMS sent or received. Still yet, iPod Touch users and iPad owners wouldn’t pay SMS charges to begin with.

However, the iMessage impact is still significant with the number of messages that Apple and its iCloud servers transmit daily. Surely, there would be some impact on some carrier networks where messaging isn’t bundled or included in a mobile plan. At the high end, 2 billion messages at $0.20 per message equates to $400 million of savings for messaging costs to iPhone customers.

iPhone-iMessage-2-660x440There are other messaging services as well, from Tango to Skype to more traditional instant messaging and chat standards like AIM from AOL, Google Talk, and Yahoo Messenger. Samsung has also released its cross-platform ChatOn service as well to take on iMessage and Google is leveraging its Google Talk, Google Plus, and Google Voice assets in the messaging departments while Microsoft is giving Skype a bigger role. RIM already has a popular BBM service that’s very similar to iMessage.

At its onset, the thing that iMessage does right is that it’s seamless and easy to use. It’s associated with your mobile number and you don’t have to install an app or setup a profile, username, or account ID. Users are later able to add email addresses where they can be messaged at as well to expand iMessage to non-cellular devices, like the Mac and iPod Touch. When iMessage launched, rival services required users to download an app and set up a profile. Take Skype, for example. To message another user, they would have to have had Skype installed and configured on their devices, and each Skype user must have a username. This creates a more cumbersome process. iMessage is also intelligent enough if the server is down to send your messages via SMS or MMS channels as well.

The service isn’t without fault, however, and has faced some down times in the past.

The benefit in cost savings for iMessage would be more significant in the pre-data sharing era that AT&T and Verizon have both embarked on as these new plans already come bundled with an unlimited SMS package.


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