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« Bi & Ai | Main | What comes after Communities Dominate Brands? »

May 21, 2007

Comments

Federico el Sueco

This hi-lites the one problem with the iPhone: the lack of actual keyboard. Difficult to tap under the table when you cannot feel the keys!

Tejas

Hi Tomi,

I agree that text messaging (what we laggards call SMS :)) is catching on in the US. Understandably, teenagers have really latched on to it and we are seeing multiple messages per day on average. However, I believe it has to be noted that there are some fundamental differences between the US and ROW - and this does not imply the US is ahead or behind - just different:
- there is more voice to SMS parity in terms of pricing in the US than most places (esp. if you consider the free airtime on weekends, nights, etc. as well as the airtime buckets). Voice is after all, still the most natural form of communications, and this applies to the entire world.
- all-you-can-eat data plans are commonplace and this makes it easier to adopt Blackberry and similar services, esp. if the employer is going to foot the bill.
- all carriers today in the US offer SMS messaging plans, but none (to my knowledge) offer any "corporate-focused" SMS services - with delivery guarantees, auditability, etc.
- Blackberry offers PIN-to-PIN messaging, which is equivalent to SMS (i.e. device to device, rather than device-server-device). This has been pretty popular (e.g. Canada, Wall St.). However, there has been some backlash amongst some employers for security reasons.
- for messaging, we are a more email centric culture and are used to seeing long message threads with multiple folks. Most SMS client UI on devices today still do not give the threaded look-and-feel

Bottomline, I personally am a huge beliver and user of text messaging. However, we must be prepared to accept that although SMS usage in the US will continue to grow strongly, it may never reach the levels of Korea, the Phillipines, Finland, etc. But we will somehow manage to communicate with each other regardless. And we will do just fine :)

simon

Hi Guys

Like the Nike ad, JUST DO IT!!!

When you run a race you begin to understand the hardships and challenges. I am what you would refer to as a TXT maniac. I built a solution to deliver mobile commerce in Africa 7 years ago that runs 100% on TXT. I ended up servicing over 3000 trading agents with a "home built" TXT call center.

I am now on the mission of providing the power of TXT to all businesses on a generic platform.

I have recently being exploring the TXT market in Canada and the Caribbean....

Some comments:

1. I was told in the caribbean (Jamaica)...(A traditonal CDMA network, converted to GSM). That the culture of people here is different......people will generally not reply to TXT messages.

I was told this by a delegation of 20 "high powered" Jamaican businessman.

So I did a test?

I sent an SMS to all parties asking them whether the West Indies would have a chance to get to the semi finals for the cricket world cup because most people think that they would battle to make 50 runs against any team playing.

I sent the same as an e:mail.

Result:

18 out of the 20 people replied by TXT within 5 minutes !!!!! These were the same laggards?

11 responses via email. The last response came in 2 days later.

So what does this mean.

Well TXT is more interactive and immediate than e:mail (obviously).
This does not matter whether you are in timbucktoo or Guatemala. It is not about the technology, it is all about the product adoption curve.

Tomi, you are on the button. GenC will bring it to the fore.

Question to all TXT entreprenuers:

How do we effectively market TXT for business to laggards?

(Great Blogg thanks)

Tomi Ahonen

Hi el Sueco, Tejas and simon

Thanks for writing. And there seems to be a Latin American theme to these as el Sueco seems to be Spanish (I don't know what it means), Tejas I believe is also the native for Texas, meaning friendship if I recall, and simon obviously writes of a Caribbean experience in SMS. Funny coincidence. But let me addreess your comments individually.

el Sueco - yes that problem with the iPhone and lack of a physical keypad/keyboard. I totally agree with you, and immediately after the iPhone was announced in January I wrote an Open Letter to Apple begging them to ensure the iPhone can do texting very well. You might enjoy that blog. If you search our site with the term Open Letter you should find it easily.

Tejas - I will accept that the circumstances in America are different to the rest of the World. And there are likely going to be regioual differences for a long time to come. But you also present several widely held myths or misunderstandings about mobile telecoms and SMS text messaging, which I want to discuss here briefly.

You write what seems on the surface to be totally reasonable and rational, saying "Voice is after all, still the most natural form of communications, and this applies to the entire world."

Actually that is not true. Voice is the LEAST private form of communication. It is natural for communication from one-to-many, ONLY. In private conversations it is not optimal. We build all kinds of barriers to isolate us when using voice, from business executives having offices with a door they can close for privacy, to the cliche Hollywood movie about older teenagers who go sit in the car so they can talk in private out of earshot of their parents (and then start kissing etc).

Now consider SMS text messaging. It is the MOST private form of communication ever invented. More private than IM instant messages, voicemail, e-mail and even wireless e-mail on a Blackberry. All humans appreciate the value of private communication, even if some individual communications needs privacy and others don't.

To show how universally what you said is explicitly untrue, the UK has since last year - 2006 - found that the majority of UK residents, not only teenagers, not only busy business execs - the majority of all UK residents now prefer to use SMS texting rather than voice calls. We reported that finding here at this blogsite. And since then, a couple of weeks ago, we reported that actual voice call traffic on mobile phones in the UK is now in decline (first decline ever on mobile phone calls) while that trafic is shifting to dramatically increased SMS text messaging use.

The UK average outbound text messaging is already 6 SMS per UK phone owner per day - several more than outbound phone calls. This is of course still far from South Korea (10), Singapore (12) and the Philippines (15 SMS sent by cellphone user per day).

It makes sense, Tejas, if you have not become addicted to the most addictive mobile service ever (according to Queensland University of Australia finding, SMS is as addictive as cigarette smoking). But the reality of addiction is that then behaviour no longer follows a rational pattern.

You say Blackberry. Fine. Blackberry is a crutch for older people. Blackberry was launched in 2001. Today there are 8 million BB users around the world. e-mails sent by a Blackberry can be received by potentially 1.1 Billion internet users. But there are 1.9 Billion people who are active users of SMS text messaging, and over 99% of the 2.8 Billion cellphone users in the world can receive an SMS text message. And of course yes, with its alphabetic keypad, a Blackberry is a very good device for sending SMS text messages !! When a business exec with a Blackberry learns to use SMS, we have REAL power in communications. Then you get easily into the 20 even 50 SMS sent per day average usage levels as one woman executive I met at the Telco 2.0 conference this February in London who was averaging over 50 SMS sent every day.

Oh, ten percent of British students, and a third of South Korean students send over 100 text messages every day. Now remember "addictive" - ther is NO going back, ever. This is a snowball rolling down a mountain, it will only grow.

About US carriers and corporate solutions around SMS. These are coming, don't you worry. I was there at mobile internet conferences and various disruptive tech events etc in America pitching the SMS story when nobody wanted to hear it since 2001, but gradually the message got through. By 2004 the inter-operability of SMS text messaging was enabled across all major carriers in America. Even then, the North American carriers had various other barriers - such as making SMS usage a separate service that needed to be subscribed to, and it needed to be enabled. Today (I believe) all carriers already make SMS a default service part of the basic bundle. These things have delayed American adoption. But it is inevitable.

All the usage numbers in America follow a beautifully consistent pattern with UK usage four years ago. Today American cellphone users average 0.5 SMS text messages sent across the whole cellphone user population. The growth is enormous. From 30% who used SMS in 2005 it grew 40% to 42% using SMS in 2006 (source CTIA). It is nearly half of all cellphone owners today. And things like American Idol voting bring in tons of new first-time SMS texting users every year.

Blackberry PIN to PIN messaging, yes, in my mind that is "texting" even if technically it is not SMS, I think there the usage and service is so equivalent, the user won't sense a significant difference, except, of course, that there is the horribly tiny circle of friends who have Blackberries. How about your secretary? Ok, maybe your employer is that clever it gives the secretaries company-paid Blackberries (few do) but how about your business associate's secretary? Or your wife? Your daughter in school? Or your nephew who is in college and seeking a job interview. Or the chauffeur of the limo service that picks you up from the airport etc. None of these are in the target market for Blackberries. But all of them can easily be reached via SMS.

Notice that in the USA with 220 million cellphone subscriptions, at 42% active users of SMS, there are already 92 million people who use this technology. And total worldwide Blackberry user base is 8 million. Even if we assumed 95% of all Blackberry users are in the USA (sorry Canadians) - even then SMS texting already by end of 2006 had more than 10 times more users in the United States than total Blackberry population. Blackberry is a wonderful device but it is a red herring. It is a random little large wave hitting the beach, like that of the wake of a passing ship. But the tsunami already forming that will wipe out the beach is SMS text messaging. Unstoppable. Already clearly visible. Enormous.

Imagine when Americans catch up with UK of today - in four short years mind you - 85% of Americans (total Americans, not cellphone owners) will send SMS at 6 messages outbound PER DAY. Thats 255 MILLION US citizens, and 1.5 billion texts per day or half a TRILLION text messages per year.....

And this is inevitable. SMS is addictive as proven by the first ever study on mobile phone addiction at the Catholic University of Leuwen in Belgium. And today over 42% of American cellphone owners have already caught this habit. The tide has turned long ago. No turning back.

e-mail centric culture. No, that is also a myth and red herring. America was once a fax-centric culture. I was there in New York working for New York City's first ISP, when most of our customers wanted fax gateways and I we were peddling this silly idea of e-mail gateways, much more efficient communication, e-mail than fax... That is typical attitude whenever meeting a new technology. I'm certain similar sentiments existed about radio and TV, about newspapers and internet news, etc. Those are held by older executives and experts who are (usually subconsciously) resisting change.

If young people (teenagers, students, young adults) were lukewarm to this technology, then I'd have reservations. But all teenagers from Finland to France to South Korea to California say they prefer SMS to e-mail. American kids reported last spring here at our blogsite when the big study came out, said "e-mail is like so last year."

About the "threaded look". Sure. That is for digital immigrants (older adults who have to learn to use SMS texting). They will miss the threaded look. That will counterbalance on the two unrefutable supreme benefits of SMS - it is undeniably the fastest form of communication ever invented (when measured by communication throughput) and SMS is also the most private form of communciation. Do Americans not value speed? Of course they do. Do Americans not value privacy. Of course they do, just like all other humans in Europe, Asia, Africa, Australia and Latin America.

simon - what a WONDERFUL example (Jamaica cricket survey by SMS and e-mail) thanks !! I know the empirical survey data is too small to have real statistical significance, but this kind of finding would echo everywhere in the world. In advanced messaging markets it would get 95% responses via SMS, and the majority of the last 5% e-mail would actually be Blackberries and other cellphone e-mail systems ha-ha.

Wonderful example, I have to blog about it !

Thank you all for writing

Tomi Ahonen :-)

Tejas

Hi Tomi,

Thank you for taking the time to address the various points I had mentioned. Please don't misunderstand me. I firmly believe in the power of SMS and have been using it for years. My points were merely based on observations I have made here. I believe a lot of these usage trends boil down to economics and business models and network effects. If suddenly, voice became free or dirt cheap in the UK, I would venture to guess that voice usage would go back up, regardless of the current SMS usage metrics.

Here are some additional observations:
- I have several relatives in India. Many of the old timers there (50+ years) have adopted SMS. Why? Not because it was easy for them, but because a) it was much cheaper to use SMS to communicate with their sons/daughters in the US at Rs. 1 per SMS (~USD 0.02) than international voice, b) because of the large time difference, real-time communication was not always possible, and c) they don't have the frame of reference of email to rely on.

So, if you make it cheap for US senior citizens, they will use it too.

- now take the several 20-something guys and girls that come here from India. They were huge SMS users back home; however, their SMS usage in the US goes down significantly. Why? Not because the SMS technology is different, but because a) it is more comparitively more expensive than in India (if you wait for 2 hours when it is 9pm, voice becomes free), b) network effect is not there to the same extent (i.e. their friends use voice, email, IM, Orkut, MySpace, etc.).

Again, back to economics.

- finally, take the trends observed in US teenagers who enter the workforce after graduating. I don't have results of massive studies, but have just seen several of these cases where the SMS usage went down dramatically (again because of network effect not being there). Maybe that will change over time.

I am NOT among the 8M Blackberry users; however, I have been around a lot of them (even yuppies, not just 50+ crowd) to see that they don't use SMS as much as their EMEA / APAC counterparts. Will that change? Maybe.

Finally, my comment about voice being the most natural way to communicate was based on speech being one of the fundamental senses man has used for ages to communicate - publicly, privately, one-one, one-many, in-person, remotely, etc. Last I checked, texting has still not attained the same status of being an innate human form of communication. Clearly, there are times when texting is better suited than voice and those scenarios are on the rise.

So net-net, I agree about the power of SMS; however, we should be cognizant of differences and have realistic assumptions and expectations.

BTW, having said all of this, I am looking at launching a business-focused SMS service as part of my company's offering and I truly appreciate the volumes of WW information you provide on the blog!

Regards,
Tejas.

Tomi T Ahonen

Hi Tejas

Nice of you to return to our blog and leave more comments.

I hear you, I really do. My comments reflect a frustration of really repeating myself year after year to audience after audience. I was there in Israel in early 2002 when they gave these same kind of responses to me. But right about then the network interoperability of SMS text messaging was enabled, and Israel rapidly caught up with European usage levels.

Had NOTHING to do with text messaging price. And nothing to do with voice price. Was simply that the growth of cellphones in Israel had grown past the tipping point for SMS usage take-off (which has been identified by Ovum to be 30%) and in Israel was then artificially held back because of the lack of inter-operability. Since then, almost identical pattern to the Industrialized World and well on track to take a lead position now, to correspond with Israel's high cellphone penetration level.

I've seen this happen time and time and time again. Germany, they were saying they were not like Scandinavians and Italians, but sure enough, they follow the exact same pattern as leading European countries, with pretty much exactly the same lag as German cellphone penetrations and other service usage.

There is a VERY CLEAR correlation with American SMS usage (per subscriber) and British usage - on a four year lag. I've tracked it for several years now. Holds firm, four year lag.

I am 100% certain - yes, 100% certain - this pattern will of course hold for the next four years as well. The only thing that might happen, is that America might catch up more rapidly (like Israel did), not more slowly, than the rest of the world.

The numbers are irrefutable. But go back two years and look at any others and their views of American SMS text messaging use for the future, they all were saying, no, won't happen here, its Blackberry and wireless e-mail and SMS will remain with teenagers only.

Funny, go back to 2000 in Britain, guess what. They said back then that SMS was only for teenagers, wouldn't follow that crazy Finnish trend that business execs also could use SMS text messaging.

Did I mention in this thread (or the blog, I forget now) - that the Finnish Prime Minister has his voicemail greeting saying "don't leave me voicemail, send me SMS text messaging instead." He broke up with his girlfriend via SMS - was a big scandal in the press (not that he used SMS, but the breakup message of course was leaked by the jilted lady to the media which had a lot of fun about it).

The Pope has been sending a daily text message greeting for many years already. Major European and Asian companies such as global banks and major grocery store chains etc send employee alerts via SMS. Its a total culture change. Finnish libraries send your notices 3 days before your book is due via SMS - and you can extend your book loan by reply SMS.

I have literally hundreds of these kinds of services (and at least 50 if not 100 discussed here at this blogsite and several hundred in my first four books).

Back to America. It will happen first, because SMS does have unique benefits you cannot match by voice calls and ultimately low prices; or voicemail, or wireless e-mail or any other mechanism. Secondly because SMS text messaging is addictive. There is no going back, ever. No matter how much some messaging/communication behaviour may change, SMS will remain. Fax can vanish. Voicemail can vanish. SMS will remain - it has been proven to be the most addictive communication method, as addictive as smoking.

Those young adults who get a job - there is NO way they stop texting. They may shift some communication to other methods yes. But they will always text. And they will teach their elders at work to do so, slowly, one colleague at a time, but it will spread.

Happened in the Philippines, in Singapore, in India, in South Africa, in Italy, in France, in the UK, in Sweden, in Finland - in every country except the USA and Canada so far. France was dead last outside of North America and even they are now SMS crazy.

Oh, the last reason why - I totally believe in numbers. If I see a pattern. I see it in Finland. I see the same pattern in Sweden - with a one year delay. I see the same pattern in the UK with another one year delay. I see the same pattern in Germany, with another one year delay. And so forth. I believe now in this pattern.

Then if I see several years of data in the USA fitting this pattern PERFECTLY - then yes, I would lay any money on the odds that SMS will be used by 85% of American cellphone owners in 4 years - and as long as American carriers don't mess up the phone adoption (which doesn't hold the pattern as strongly as SMS, but is still very similar to the rest of the Industrialized world) - that American cellphone penetration will pass 100% per capita in four years.

Now Tejas, it is NOT to say, that America isn't different from Europe or Asia (or Australia etc). Yes of course it is. For example your current phones are pitiful, weak lame phones compared to what we have here in Asia or in Europe. The same goes for the carriers, very abusive, restrictive, selfish and arrogant. Like European carriers were only five years ago. That all will change.

But yes, America is different. Sadly, and ironically considering the cellphone was invented in America - this is one industry America totally served on a platter to the rest of the world. The latest news from Motorola again echo the same matter. It had not gotten its house in order, after all. Its a rough game, selling cellphones, and Nokia is very strong in it. They came back. Meanwhile LG is making enormous inroads into America.

Same could be said for Lucent (once the world's largest wireless telecoms equipment vendor, is now the lesser partner with Alcatel of France, not unlike Daimler-Chrysler)

But yes, Tejas, I hear you. You make good points. I have, however, really heard them ALL before, many times before, from one market to another, as I've been "evangelizing" this SMS money-making miracle for near ten years now.

I'm sorry therefore if my positions and comments seem dogmatic. I am often reminded of the analogy of the Chinese in 1997 (before Hong Kong was handed back to the Chinese) - at the time when they started the local production of the first Western car in China (The Audi 200/5000) - and some Chinese experts were quoted on what road planning needed in China. Their mindset was all about bicycles - because that was China's frame of reference. Everybody had bicycles. Cars were rare.

That is similar to American comments today about SMS. Its easy to be seduced by the familiar, voice calls, voicemail, e-mail, instant messaging. But it is very clear - the very last sign was that ComScore survey of American youth preferences - where SMS came on top, ahead of IM Instant Messaging and far ahead of calls and e-mail. The exact same pattern is happening in America.

But also Tejas, you are well on your way already to having discovered that. You don't need to take my word on it - all I ask is that you monitor the space. Your mind is open enough, you will soon spot the pattern for yourself if it really is true. And if this silly Ahonen here at the Communities Dominate blog was actually a loonie, you didn't miss out much.

But if this 80 billion dollar industry - the most profitable industry in the economic history of mankind - is really set to grow more worldwide - and massively expand in North America - you Tejas can benefit from being one of the early ones to really "get it".

Good luck.

And please, do tell us when you launch things around it, we'll want to know and celebrate the success of our friends.

Thanks for returning to the blog.

Tomi Ahonen :-)

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