Mobile

SMS is doomed: Google working on Android iMessage, BBM competitor

Just after Apple announced iMessage app in iOS 5, it appears that Google has its own Android messaging client in the works, the Wall Street Journal reports.

The paper didn’t have any additional details on Google’s messaging app, but just like iMesssage, it’s reportedly being positioned as an answer to Research in Motion’s popular BlackBerry Messenger app.

Google’s new messaging app could fall under the Google Talk name, but it will need to do much more than that service, which is based on the Jabber IM protocol. IM is less convenient for mobile devices since it requires a steady data connection to remain logged in. To function as a texting replacement, Google needs to make sure its messaging app can accurately tell users when messages are sent, delivered and read.

For consumers, these new apps will offer faster and cheaper integrated ways to message friends. But the outlook is less rosy for carriers, who will likely see their lucrative text messaging revenue take a major dip. The messaging apps will move texting-like activity into cellular data networks and out of carrier’s aging SMS networks.

Consumers currently pay anywhere from 20 cents per text to $20 a month for unlimited texting on SMS networks. Most of that money is pure profit for the carriers: a dollar of SMS charges can produce around 80 cents of profit, while carriers only see around 35 cents of profit from a dollar of data or voice fees, analysts at UBS tell the WSJ.

The new messaging apps will further diminish the growth of texting. AT&T’s year-to-year texting growth was 21 percent in the first quarter, down from 41 percent last year, according to UBS.

Consumers will still need to rely on traditional texts to message friends on less advanced phones, but those devices won’t be sticking around for much longer in their current form. Eventually, even dumbphones will move to smarter platforms like Android and take advantage of ubiquitous data networks.

I won’t shed many tears for the carriers in this situation. They’ve been making a killing by overcharging consumers for texting, and it was simply a matter of time, especially with the rapid success of RIM’s Blackberry Messenger service, before more efficient messaging solutions appeared on data networks. We’ve already seen third-party messaging apps like Kik take off over the last year, but having integrated messaging in iOS and Android will signal the death of SMS once and for all.

We’ll be exploring the most disruptive mobile trends at our fourth annual MobileBeat 2011 conference, on July 12-13 at the Palace Hotel in San Francisco. It will focus on the rise of 4G and how it delivers the promise of true mobile computing. We’re also accepting entries for our mobile startup competition at the show. MobileBeat is co-located with our GamesBeat 2011 conference this year. To register, click on this link. Sponsors can message us at sponsors@venturebeat.com.

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