Mobile IM to surpass SMS?

A recent Gartner study estimates that 189 billion mobile messages have been sent by U.S. mobile-phone subscribers in 2007. It forecasts 301 billion mobile messages sent in 2008.

If correct, those figures would still account for only a small fraction of the 2.3 trillion messages to be sent across major markets worldwide in 2008 (a 19.6 percent increase from the 2007 total of 1.9 trillion messages). Asia is the biggest mobile-messaging market worldwide. China is in the lead, with approximately 560 billion SMS messages sent in 2007, followed by the Philippines' 430 billion and Japan's 190 billion.

The vast majority of the 189 billion mobile messages to be sent in the United States are expected to be SMS text messages, with an average use of about two SMS messages per U.S. subscriber per day. That is similar to the level of SMS activity in the United Kingdom in 2005 and still only at the global average of 2.1 SMS messages per day. The average number in the U.K. today is six SMS messages per day. Singapore is at 12, and the Philippines even at 15.

While the U.S. is still lagging behind Asia and Europe, its adoption of SMS is obviously accelerating. Gartner predicts that this will further propel mobile-payment solutions, as SMS will continue to be the dominant channel for mobile payments.

The analyst house believes that the number of consumers making payments using their mobile phones is set to soar from 32.9 million in 2008 to 103.9 million in 2011.

Despite the continued growth of SMS usage, however, Gartner expects growth rates to slow as direct mobile connections are becoming increasingly cannibalized by mobile-IM communities and social-network portals.

As I wrote before, there is huge potential for an elegant, seamless, cross-platform, and cross-media IM solution that enables the ideal of the "never-ending conversation."

It looks like Apple might again be the first mover here. The company is apparently developing a chat application for the iPhone, as revealed recently through a patent application that describes a "portable electronic device with a touch-screen display, comprising (a) means for displaying a set of messages exchanged between a user of the device and another person in a chronological order." That's basically the description of an UI for an iPhone IM application.

CNBC analyst Jim Cramer thinks that an iPhone IM application is going to be to instant messaging what the iPod was to the Walkman. And Ars Technica is not alone when it suspects that most of the iPhone users will probably value "a way to use instant messaging without using up their SMS message quota."

While the iPhone currently relies on SMS, Apple could add AIM, Jabber, or Twitter to the interface and thus become the de facto universal conversation enabler. However, building a native IM application (and adding third-party chat applications) could create conflicts with iPhone operators that might be concerned about losing potential SMS revenue, if users sidestep SMS by using IM programs.

We will soon find out. The momentum is building up toward a possible unveiling of the next-generation iPhone at Apple's Worldwide Developer Conference on June 9.