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« Lets Understand the Mobile Phone Market, installed base and smartphones vs dumbphones | Main | Bloodbath update for December, as we await EOY data for 2010 »

January 04, 2011



SMS is dying, even the large players like Vodafone are seeing a decline in SMS profits as smart phones are taking over. Talk to any telco executive. WHat's this guy smoking?

Tomi Ahonen

Hi Hoi, karen, steve, Den, Tony

Hoi - good points. On the mobile/telecom/internet not mutually exclusive, fine, good point, but they tend to be for a vast part of the users, devices, networks, end-user prices, and user experience - different. Yes there is overlap but very little. Fixed telecoms is voice. mobile has moved past voice and primary use is SMS so they are not the same. Fixed telecoms is community phone (family phone, company switchboard etc) while mobile is totally personal, not shared. Etc. Same with internet. Handset vs PC, primary uses on phone are SMS and voice calls. on web its search and social networking. The pricing models totally different, mobile is per call, per message. internet is broadband flat fee and advertising, etc. I see your point, I think the overlap area is a very small part of the picture. On reach - the premium SMS example you said, is still valid for anyone, you don't need to be a giant media empire to use it.

karen - ?? thanks?

steve - good point about HTML, it is rapidly taking over the installed base more than 6 of 10 phones in use already support HTML. But its that 'no phone left behind' thnking where I do think 35% of the population who HAVE a phone (and many of who do occasionally surf some WAP pages on their simple phones) is way too big a segment to ignore. Then when HTML gets us 90% and WAP is the incremental 9%, then I think we can start to decide to forget about the WAP gang haha, not yet, not for a couple of years still.

Den - thanks

Tony - hey, thanks and my very best to all at Nexmo!

Thank you all for the comments, I'll return with more

Tomi Ahonen :-)

Tomi Ahonen

Hi Bartek, Jonathan, Bob, Greg, Lars, fate,

Bartek - yeah, good try, but not quite in the scale of Japan or Finland or South Korea, sorry..

Jonathan - ah, I see, yes, good point. There is clearly a lot of growth left in the long form SMS numbers, yes totally agree

Bob - my pleasure! happy you enjoyed it

Greg - cool. see muy reply to Jonathan

Lars - haha, and no doubt a third of all the stories I write in the next decade will originate from you or your links and contacts eh.. Cheers! Happy new year!

fate - You say SMS is dying. All the evidence is to the contrary. SMS just passed 4.2 Billion active users and the ITU predicts growth of 25% in total traffic from 2010 to 2011. No, SMS is anything from dead. That the profits are declining in SMS is inevitable over time - we modelled this with all major operators a decade ago - I personally was doing that with Vodafone's strategic planning (Vodafone itself says they used me in their forecasts) so we've seen this coming for a very long time. The point is that today, more than a decade after those projections, SMS still delivers half of European mobile operator total profits. That is astonishingly robust for SMS. That the profits are gradually declining is no sign of a problem, SMS is still by far the biggest profit engine (bigger than voice calls and MMS the two next biggest groups).

Thank you all for writing

Tomi Ahonen :-)

Phil W

Hi Tomi, I've noticed the internet articles on the report on the App stores that Distimo has compiled. Interesting that it is saying the marketshare of free apps has risen and the cost of paid apps has dropped. That looks to me like the App bubble may be beginning to burst?

Phil W

Hi Lee, What you say may be true but I just copied & quoted from a web entry on the report:

"Finally, Distimo identifies strong downward pressure on the average price of applications across all the stores - down 12% on iPhone, 24% on BlackBerry and 29% on the Ovi Store, although Android bucked the trend with a 1% rise in average price."

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Juan Pablo

Again, thanks for a great, great post.

Amazing data. Amazing facts. Need some digestion now.

(pst, a individual article is called "post". "Blog" is the sum off all the post. I just tell you because the title sounds weird )


I recently came across your article and have been reading along. I want to express my

admiration of your writing skill and ability to make readers read from the beginning to the

end. I would like to read newer posts and to share my thoughts with you.


Premium SMS where you already have TV as your marketing channel is all great, but for a start-up, accessing these marketing channels is pretty difficult.

Robin Carlisle

Tomi, you need to include a "share" link so people can share this on Facebook, etc.. I don't want my cutting edge friends around the world to miss out on all your keen mobile insights. I'll copy/paste the address to my page, but if you add the Facebook icon, it would make that so much easier. Can't wait to read your ebook tomorrow. If it has half the meat you've served up in this article, it will be quite an appetizing day, indeedy!


Wow, that was a tall drink! Thanks for the information, Tomi. I am certainly going to need time to absorb this information, but am struggling at the moment to picture how SMS actually (from a technical point of view) works in many of the examples you have mentioned.

I think that I have missed the early part of the SMS wave here in the US (before discovering Swype I couldn't stand typing on a phone and largely ignored texts when they came in). At any rate, I think of text messages as just that- dumb text messages with with no personality or pizazz.

I have to admit that my bubble was burst a bit in reading the article because, after purchasing an iPad for my family, I have fallen in love with app development and have many ideas of my own. Regardless, time and money is always a factor so I would hate to plant a tree that won't bear fruit.

I am struggling to picture how some of the cool things you have mentioned are technically possible over SMS. For example, regarding the pre-paid bus tickets for the clinic visits in Africa, is there a QR code or something texted to the recipients and then they present that for scanning at the bus stop?

Perhaps my brain is just tired and saturated at the moment. Will google the topic tomorrow.

Thanks again for the generous knowledge share.



evden eve nakliyat

with variations on a theme (iPad) and keep the price high, accept that this is as good as it gets and watch the stock tumble or diversify the product to lower priced products if they're confident in the ecosystem they've created.

Christian Louboutin Classic Black

I recently came across your blog and have been reading along.

The comments to this entry are closed.

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