Smartphones Threaten the Future of Texting

The smartphone has rapidly become one of the most popular and sought-after technologies of our time. But while they have successfully boosted demand for data plans, they may be threatening to render the standard text message plan obsolete.

Apps available through various smartphone providers have offered means of circumventing expensive text messaging plans by allowing users to piggyback on their existing data plan. Programs such as Google Voice and Kik are widely available, Blackberry users turn to BlackBerry Messenger, Verizon Wireless users all have Skype readily available, and Apple is developing an iMessage system to be released in the fall. Microsoft’s plan to buy Skype, which recently purchased messaging program GroupMe for an estimated $80 million, could ensure all Windows Phones carry the program in the future.

“As smartphone penetration increases and applications like WhatsApp take off, we believe high-margin texting revenues could be at risk,” John Hodulik, telecom research analyst at UBS, said in a recent note sent to investors.

According to CTIA, texting growth has slowed in recent years, although the practice is still widely popular as a means of communication. While text messaging plans are incredibly lucrative for wireless companies – they make up about 25 percent of the profits mobile companies make from users – the number of texts sent per subscriber in the U.S. fell for the first time ever in the first quarter.

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