IM to Account for 75% of Mobile Messaging Traffic, but Only 2% of Revenues

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Despite accounting for 75% of the traffic or 63 trillion messages by 2018 IM (Instant Messaging) apps will only generate 2% of the mobile messaging market's revenue at just over $3 billion.

The prediction, by Juniper Research stated that the increasingly high IM traffic volumes are the result of a number of factors, but chief among them is the fact that usage of IM apps is inherently different to usage of SMS; users typically send up to 10 'chats' to convey a message which could be contained in 1 SMS.

In addition to this, stickers, emoticons, images and group conversations all add significantly to IM traffic, as well as the fact that handset users -- the younger demographic in particular -- typically install multiple IM apps. Report author Sian Rowlands added "Adoption of IM apps has rapidly accelerated over the past 18 months, something which has led Juniper to revise upwards our forecast for the volume of IM traffic."

Routes to Profit

Nevertheless IM apps are continuing to encounter difficulties in generating revenues, given the infancy of the market. The hundreds of IM apps available are taking different approaches, some utilising in-app purchases and games, others with advertising or subscriptions. Indeed, some apps -- such as Facebook Messenger -- are loss leaders, and only serve to increase engagement with a companies' separate revenue generating app.

Other key findings from the report include:

Mobile operators are continuing to work on the RCS (Rich Communications Suite) initiative, which has potential to see traction after 2018, although progressing at a slow pace.

The Far East & China will generate the most traffic across all mobile messaging formats, throughout the forecast period.

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