Thursday, November 3, 2011

SMS is Dying, Viva SMS!

My love affair with text messaging started when I arrived in Nairobi, Kenya in May 2005. I was amazed that the wireless carriers in East Africa were so much more advanced than in the U.S. What I found particularly useful was that they could text money to each other using SMS - no apps required. As soon as I returned to the U.S., I created a proof of concept, using a GSM modem, and partnered with an angel investor as we tried to raise funding from Tech Coast Angels for the now defunct Acasero.

This morning, I was very pleased to see that Amazon announced a new web service which allows anyone to send text messages from a short code. Sending an SMS from a short code, which is a five or six digit phone number, is not an inexpensive proposition. It will cost a company at least $1,000/month not including the metered costs of sending each text message. I've covered the details in this white paper that I wrote a few years ago. But, with today’s announcement from Amazon, that cost is literally reduced to pennies.

SMS is Dying
The wireless carriers' approach to marketing SMS is what I call "bad." RIM has gotten around it, for years, by allowing direct messaging from Blackberry to Blackberry. Now, Apple's iOS 5 has done something similar by allowing text messages to be sent over the data portion of device's payment plan vice the SMS portion. The wireless carriers have priced themselves out of the market when you consider that it would cost about $6,000 to download a 4 MB song if wireless data cost as much as SMS.

Viva SMS
Yet, even though SMS is dying, it's still very useful in both developed and developing countries. It will continue to serve a niche for many years to come. The key strength of SMS is that it's a push (event driven) messaging system compared to e-mail which generally has to poll a server (even with "push" e-mail utilizing the IDLE command, it's still not a responsive as SMS).

So, now that SMS is available to the masses via a short code, what are some of the possibilities? I can think of a few, very marketable, ideas.

No comments: