The death of SMS

New research forecasts that, in 2014, mobile instant messaging services (IMS) will generate about 70% of all messages sent from mobile phones – but only about 3% of the value.

Financial services firm, Deloitte Touche Tohmatsu Limited’s (DTTL) predicts that instant messaging services on mobile phones (MIM) will carry more than twice the volume (50 billion versus 21 billion per day) of messages sent via a short messaging service (SMS).

It says that, of the 70 billion messages will be sent via mobile, text message revenues are projected at about $100 billion this year, compared to just $2 billion for mobile IM services.

The research forms part of Deloitte’s 13th Global TMT Predictions study, which found that, globally, volumes of mobile IMS and text messages will grow, even though some developed markets may see falling SMS volumes.

The top global technology, media, and telecom trends for 2014 include the 10 million unit year for wearable technologies.

In addition, the report predicts that phablets — an oversized smartphone that’s part cell phone, part tablet — will outsell tablets by $25 billon; and the total global sales of smartphones, tablets, PCs, TV sets, and gaming consoles will exceed $750 billion in 2014 and then plateau as consumer usage will continue to converge.

“Our report details many watched and often contended trends in the industry. While there has been much uncertainty around wearables, we predict that consumer interest will lead to a lucrative market with $3 billion in sales in glasses, watches, and fitness bands.”

“We also anticipate a doubling up on Pay TV, which is counter to historical expectations of ‘cord cutting’,” said Mark Casey TMT Industry Leader at Deloitte.

“Additionally, smartphones, the largest component in the converged living room group ($375 billion revenue in 2014), are nearing saturation among most age groups except the 55+ demographic, which will experience a steep rise in usage this year.”

Additionally, while 2014 will be the year of the baby boomer, the group also comes with its own set of challenges and opportunities.

“Getting baby-boomers to engage all functions of their smartphones and not just use it as a feature phone represents a great opportunity for carriers. They need to be up for this challenge though, since we expect that a quarter of these smartphone owners may not download a single app,” Casey added.

The report also looks well beyond 2014 and predicts a “perfect storm” of conditions that could make Massive Open Online Courses (MOOCs) a major factor by 2020, representing over 10% of all courses taken in tertiary and enterprise continuing education.

New technology, alternative modes of teaching and a need to continuously update quickly obsolete skills are driving the trend, suggesting MOOCs will grow enormously over the longer term, even if disruption is minimal in 2014.

Additional predictions include:


  •  The installed base of compact tablets (with screens smaller than 9 inches) will surpass the base of classic tablets (9 inches and larger) for the first time. By end the first Quarter, we expect the base of compact tablets to be 165 million units, slightly ahead of the classic tablet base, with 160 million.

Media and Entertainment

  • Doubling up on pay-TV- By the end 2014 up to 50 million homes around the world will have two or more separate pay-television subscriptions, with the additional subscriptions generating about $5 billion in revenues. A further 10 million homes will receive premium programming as part of their subscription to another service, such as broadband.
  • Broadcast sports rights: premium plus- The value of premium sports broadcast rights will increase to $24.2 billion, a 14% rise on 2013, equivalent to an additional $2.9 billion.
  • Performance rights lift recorded music revenues- Revenues from performance rights, a license payable for the right to play music to the public, should exceed one billion dollars for the first time. For the $16 billion recorded music industry, this is a significant figure.


  • The smartphone generation gap: Over 55? There’s no app for that- Over-55s will be the age group experiencing the fastest year-on-year rises in smartphone penetration across developed markets. Ownership should rise to between 45 to 50% by year-end, lower than the approximately 70% penetration rate for 18-54 year olds, but a 25% increase from 2013.

More on SMS and instant messaging

 Messaging apps killing SMS revenue

Messaging apps driving SA mobile economy

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The death of SMS