Total Pageviews

Wednesday, December 5, 2012

Daily Report: Texting Business Is in Tumult

There was a time when opening a cellphone bill was scary for the parents of teenagers. Charges for texting could reach hundreds of dollars a month.

Now, Brian X. Chen writes in The New York Times, cellphone users are sending more text messages than ever, but increasingly they are free - thanks to the Internet. While that is good news for consumers, it could cost the world's wireless companies tens of billions of dollars in lost revenue.

Standard texting, the kind where you send abbreviation-filled messages over a cellphone network, has been in decline in many parts of the world, and now appears to be shrinking in the United States. That is because smartphones can use free Internet-powered services that send messages over data networks instead, and those services ar e attracting millions of users.

The shift is opening an opportunity for big companies like Facebook and Apple and smaller start-ups like WhatsApp and Kik, which are making aggressive grabs at this market, aiming to put themselves at the center of how people communicate in the smartphone era.

It is not the phone carriers that should be sweating about the changes, said Chetan Sharma, an independent telecommunications analyst. Instead, he said, companies that have not made a smooth transition into mobile, like Microsoft, Dell and Hewlett-Packard, are the ones that should worry about their relevance in a world that is moving to smartphones and tablets.

“These guys had their eye on mobile, and they haven't really moved fast enough,” Mr. Sharma said. “There's a big question mark about whether they can actually make an impact and how long that will take.”