“Goodbye, SMS. You won’t be missed,” Evan Niu reports for The Motley Fool. “You’re behind the times, overpriced, and users have little choice but to pay for expensive plans or even more expensive per-message usage fees.”
“This is why I welcome the news that Skype has agreed to acquire group-messaging startup GroupMe for $85 million, even as Skype itself is still in the process of being acquired by Microsoft for $8.5 billion,” Niu reports. “GroupMe’s group messaging and conference call app will likely be deeply integrated into Windows Phone 7 at some point in response to Apple’s own iMessage service announced in June.”
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Niu reports, “The biggest beneficiaries of such competition and innovation will be you and me, while those with the most to lose will be incumbent service providers like AT&T and Verizon… SMS texting plans have long been a pure profit cash cow for carriers, generating estimated worldwide revenue of $5 billion. The antiquated technology has virtually no costs for carriers, yet users are forced to pay for expensive plans. AT&T’s fear recently manifested itself when the company eliminated its lower-priced texting plan. Last year, AT&T’s total revenue was $124.3 billion, and Verizon’s total revenue came in at $106.5 billion. Losing this revenue stream is unlikely to have any meaningful impact on the companies’ overall results, but no one likes losing free money.”
Read more in the full article here.
MacDailyNews Take: SMS is a scam. Good riddance. Data are data.
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]
I love it when some over-paid journalist declares other people’s revenue to be irrelevant. When’s last time one of them volunteered to take less money for their often vacuous works?
I declare that the consumer pays way too much for magazines and newspapers no doubt because journalists are overpaid! They should take pay cuts so the rest of us can have cheaper news.
Yes, and they should remove all the ads, card inserts, etc. from my magazines so I can just enjoy the articles. No one needs to make a profit, so long as they provide the service at a price even homeless people can afford.
Journalists overpaid at an average salary of $30,000 a year! The cost of magazines is the PAPER!
Who cares! That is $15,000 more than I make! It’s unfair!!!
That is $30,000 more than I make! Spread the wealth, please.
Yeah, overpriced, overpaid, etc!
Also, what’s a newspaper?
While the humor is understood Bill, you might be surprised to learn that on a percentage basis (now that many of the shakeouts have taken place) more newspapers make money, on a percentage basis, than websites…Even if you narrow the field to just NEWS websites…Most of them make a tiny sliver of money because print still has more value for the reader and advertiser. Yes..it’s still in decline, no argument there…but pick up your Sunday newspaper or a copy of Vogue magazine…both still incredibly profitable…and no iPad news or magazine app has yet to be profitable. Print won’t go away and neither will newspapers…they’ll just change in ways that render them the most profitable they can be. Smaller? No question of course. Less generalist? obviously…but gone? Not for some time to come.
Well, your solution is staring you in the face: charge $25K and undercut those bozo journalists, and you make +$10K this year!
hmmm…so this sport thinks depriving at&t and verizon of their texting fees is a bad thing, it seems, or else he’s making an effort to defend the company (not sure which one he/she works for). i think both of these behemoths won’t lose financial standing if they lose texting fees, although you can rest assured they will make up the difference without increasing services. still can’t figure out the strident defense of these gougers.
I wasn’t defending AT&T and Verizon. I was attacking the attitude of the author. I get tired of all this marxist-inspired class-warfare garbage. It gets on my nerves. I get tired of the “So-and-so makes too much money…they won’t be hurt if they give me some.” The endless poor-mouthing gets tiresome.
They offer a service. It has a price. You can either use it or not use it. If you think it could be done more cheaply, then do what Apple did…invest your money and start your own competing service.
You, no doubt an average person, are paying $40 – $200 per month to have instant communication wherever you go whenever you want. Louis IV would have been quite envious!
People need to quit whining about how oppressed they are because they have to pay for something. Get some historical and world perspective and you’ll see just how good your life really is compared to what it could be.
So you think the carriers should be allowed to gouge consumers all they want, wildly overcharging them for a service that costs the carriers themselves little if anything extra?
Fuck you, James.
The again, this is about what I’d expect from half of Team Rocket…
yea. I think you ought to be able to charge what you want for services you offer. Same goes for verizon and at&t.
Who are you to seek to dictate to other people how much they should work for? Do you want other’s dictating that for you? How much are you paid to do your job? Don’t you think you you should take a pay cut so I can get whatever the fruits of your labor are for free?????
If you don’t like the price, don’t buy it….or find a cheaper alternative.
You have what is called “an entitlement mentality.”
As for the demand for sex…no thanks. I’m already married and get plenty. (PS. do you ever stop and think what it means to say ‘FY’ at someone? Its really an ignorant thing to say.)
SMS isn’t going to be killed off until all of these new services work with the other. iMessage only works between iOS devices. That doesn’t help me send messages to anyone who doesn’t have an iPhone, so I would need to keep my unlimited texting plan (especially because I have a teenager, and I don’t think any of his friends have an iPhone).
Text messaging only really caught on for most of the public in the past few years, and it will be a few more years before these new services replace it completely.
Try Textie for iPhone. You just need an email account – texting is free. It’s ad-supported, but it’s not intrusive.
We use Whats app Messenger. Very fast and free. It’s .99 cents but a great app. No reason to give the telecom carriers more $$, they get too much ready.
That’s the problem right there. I have 3-4 texting apps but it’s too much to get everyone you know to use the same one.
Wrong. The free part of iMessage is iOS only (free SMS messaging over WiFi). When you have no WiFi it will work just like the SMS app does already (it will cost money).
ATT now only has a 20 dollar messaging plan. It almost seems like they did this in retaliation to Apple creating iMessage (ATT didn’t want to lose revenue). One wonders what Apple will do now in response. Will they back off? Will they open to all carriers?
While I agree that data is data, and SMS fees are outrageous, the market sets the price.
If consumers are willing to pay, they will continue to gouge us, and rightfully so.
‘kinda remind me why i have to pay 30$ for a small wall adapter…
Somehow some way, the carriers will figure out a way to screw users to make up for the loss. 🙁
Yep, cell providers are guilty of over-pricing for a service that was nearly free a few years ago. I’m sure these companies will somehow fight against the proposed services or cave in and offer a far lower plan price to keep competitive.
There are apps like (TextNow) that already that offer free text SMS and MMS service.
The text message writing is on the wall.
This seems to be relevant to the US only. Over here in Europe (Ireland specifically) Text or SMS is bundled with Voice and Data in your monthly fee, I never pay a cent more for text and I could easily send 30-50 a day.
30-50 a day? That is so precious!
My daughters do that in a minute.
Not something to brag about!!
Anim8me2: Same here. My daughter and her friends fingers are like hummingbird wings.
SMS is a rip off. All other countries don’t charge for SMS. U.S. is the only one where we are ripped off for SMS like it is some separate service, yet it’s NOT. It’s just data and should be free!
I wish that were the case, but we Canadians get boned as well.
Which countries? In the UK it costs an average of US$ 0.16 per message for out of bundle SMS.
Yeah but we have iPhone bundles with unlimited text, so you never find yourself “out of bundle”.
So do Spaniards. Where in the world are SMS free???
Take a closer look … first the health insurance sector… next the banking system… Hollywood movies with 30 year old clichéd plotlines….now the phone companies… how much of the almighty US economy is founded on BS/scams?
Don’t forget fruit roll-ups, processed cheese, ethanol and corian counters. It’s all part of a massive conspiracy targeted at you personally! Don’t believe me, just listen to your TV and you’ll hear the secret messages
“It’s all part of a massive conspiracy targeted at you personally! Don’t believe me, just listen to your TV and you’ll hear the secret messages”
Don’t we see those secret messages on our Androids too?
Are we being used as fodder for superior forces feeding off all of our souls?
And, of course, Baconnaise.
Side-note: I’m really excited for Windows 7 Phone! Maybe the shmoes all involved in this MS-Skype-GroupMe conglomerate can whip up an OK device that keeps SOME competition for the iPhone, encouraging innovation.
I’m struggling to think of anything I’m less excited about than a crappy also-ran phone platform from a crappy has-been company.
I don’t care for texting, but have to use it to monitor some of my tower sites.
Oddly, I just added unlimited texting and calls to cell phones (any carrier) for $25 for our entire family plan.
Again, I don’t care about texting, but the unlimited cell calls will knock down 75% of my minutes.
I have three iPhones on my family plan, and they are all used as excludive phones (no landline), and we have the plan with the least allowable minutes (750 on AT&T).
Due to the fact that nearly every call is mobile to mobile, we never come close to using the allotted minutes.
Many apps, like mobiletasktracker.com already include free SMS…this one also includes group messaging with date and time stamping as each member of group receives message..
AT&T calls it free money. Customers call it highway robbery.
Nonsense.
SMS is way overpriced, but there’s two big problems with iMessage, BBM, and anything Android comes up with:
1) they’re proprietary. Dumb phones still make up the majority of phones and SMS to text to them are still needed
2) you must have a data plan to use iMessage, BBM, etc, which usually cost more than an SMS plan! And again, dumb phones often don’t have data.
Also, a data connection is nowhere near as redundant as SMS. Some people have been mocked for sending SMS in an emergency in remote locations, but an SMS is more likely to get through when you’re far from a cell tower, and doesn’t have to be sustained like a 911 call.
SMS isn’t going anywhere soon. Check back in 5 years.
There is more than SMS (Texting) that is a rip off in the USofA and Canada (at least). Here in Oz, I only pay for calls I make – not call I receive. Same with SMS & MMS. I pay a flat fee for unlimited calls to any (read that bit again) ANY phone in Australia and I get 100 minutes of International Calling and 100 SMS messages at no additional charge. My iPhone is unlocked from the vendor, so that when I travel – I can get a local SIM card and not pay the exorbitant roaming fees. We, here in OZ, may complain about our services but compared to the adventure you guys in +1 country code get stuck with – we are in… well the land of Oz. 🙂
When I text someone via Skype, I pay 15c AUS for the message but do not pay for the return text. I like Skype AND I am not to happy with M$ taking over. I smell an ill wind a blowin’.
I have encouraged most of my friends and business associates in the US to switch to the iPhone – most have and are pleased.
We shall see what shakes out. I am moving my company back to the US and am not really prepared for the stick(it to you)er shock. C’est le vie!
Cheers.
May I have your old house and cell plan? You can have mine, here in the USA.
Naive BS.
Cell providers won’t give up their free money. Just like they’re beginning to do here in Canada (Roger’s), they’ll just re-word their contracts to make you pay more for “social networking” features … normal data packets that historically have been part of your internet package. In the end, you’ll pay, and likely more than before.
Roger’s is already charging extra for “Visual VoiceMail” on iPhones. It used to be *included* in the iPhone data package. At one time all digital data used to be the same and simply came out of your bandwidth allotment.
SMS is reliable and compatible across a massive range.of devices. its also simple.
sure the pricing could come down but beyond that im not sure its a technology that needs replacing, not if the alternative is signing up for a service without interoperability between carriers on all devices, and one that requires more bandwith etc.
Agreed… anyone who thinks that taxing revenue or bypassing a revenue source will mean less for the consumer is crazy. The companies that can, will raise other fees to make up for it. Only competition will lower fees. MetroPCS and other smaller companies are going to do more than reduced SMS use. The big boys will just add fees to the overall picture and you will pay more for what you have.
SMS in the US is a rip off, but worldwide consumers don’t normally pay for it.
Here in Portugal almost all plans include free and unlimited SMS. Plus, presently, SMS works with all mobile phones.
I lived many years in Africa with pre-pay plans. People sent ten SMSs for every call because they were by far the cheapest way to say Hi, change the time of a meeting, send a reminder or congratulations, and so on. It was shocking to come back to US and find SMS costs over the top.