From Instant Messaging to Private Social Networks

Date:   Wednesday , February 05, 2014

BlackBerry (NASDAQ: BBRY) is a provider of mobile communication devices. Founded in 1999, the company is headquartered in Waterloo, Canada and has a current market cap of $4.72 billion.

Let’s start with a hard fact – SMS revenues have fallen since the emergence of instant messaging. SMS growth rates fell from 14 percent in 2011 to 8 percent in 2013. After 2013, mobile broadband revenues will form the bulk of operators’ non-voice revenues. 2013 will be the last year that SMS brings in the largest proportion of non-voice revenues, and by 2015 SMS revenues will begin to plateau. This recent survey by Ovum forecasts that social messaging cannibalization of SMS revenues will grow from $32.6 billion in 2013 to over $86.0 billion in 2020.

Now, as it is established that Instant Messaging is here to stay, the more interesting part is to know how it will evolve in the future. We are likely to see growth and changes in various forms in the Instant Messaging (IM) place. On the one hand, IMs will need to be more aware and secure; on the other they will see a deeper integration with other applications in devices, while adding on to their own feature sets.

Starting with privacy, most IMs in the marketplace are flying under the radar as far as privacy is concerned. Sharing of phonebooks is common fair and getting unwanted messages is one of the biggest problems. While this seems like a logical extension of the SMS, it also promotes one of the biggest drawbacks seen with the service – spam messages free of cost. We would see customers opting for networks that would give them greater control and limit the spam that they are getting on their phones.

The other key improvement will be in addition of services available as a part of the instant messaging platform. Video, audio and screen share are the next frontiers where we would see a lot of action in the coming years. According to a recent survey by IDC, by the year 2017, the number of smartphone shipments will approach 1.7 billion units, resulting in a compound annual growth rate (CAGR) of 18.4 percent from 2013 to 2017. With smartphone and 3G penetration improving dramatically, and operators pushing data services on their networks, these services will be key applications that will drive adoption. Most IMs already feature one or more of these features. Expect the ones that are missing to be added on to these services this year.

As humans, we love to share our lives with our loved ones. Be it happiness, love, sorrow or our daily accomplishments. These accomplishments can be in the form of a new high score in Angry Birds or the extra mile that we ran during the early morning run. This is made possible by a connection between the social messaging app and other apps on the smartphone. This is also a space where we would see action in the coming years.

To make this possible, firstly, we would see the ability to form private social networks on these IM apps. These could be as simple as a group or as extensive as a separate channel, in case of BBM. While groups are highly controlled and limited to fewer members, channels can have unlimited subscribers and be private or public – depending on the purpose. For brands, they will be a unique way to engage with their customers, providing relevant content in a social context. For individuals, they will be a way to express themselves on a channel of their choice while on the move and gather a following. The ability to measure engagement real time, segment followers and provide for targeted marketing makes BBM channels very attractive.

Secondly, we will see deeper integration of messaging apps in your smartphone. While, it is easy to share your photos and videos from your mobile phone; sharing high scores from games or data from fitness apps is not possible on most IMs. This integration will turn a new leaf in their usability.

With all these improvements, IMs will reform themselves into a new form of private social networks. These networks will be controlled, focused and highly scalable in nature. They will be created using a mobile-first approach and will be highly integrated into the mobile lifestyle of fast emerging smartphone user base in India.