SMS or iPhone: where is growth biggest?

Cellphone, Kampala. $16 gets you a phone with radio

Its easy to forget in the hype and excitement around the launch of the iPad, that for most people the iPhone, let alone the iPad, remains a distant dream.

For most in the emerging markets, of the four trillion messages sent annually, most will be sent on phones with basic text message capability – and perhaps a radio. SMS is the closest they will get to the iPad experience.

Recent research by Frost and Sullivan argues that text messaging will continue to dominate the the messaging space, but will develop significantly. They predict new dimensions to the humble SMS:

  • text messaging with contextual presence and location information
  • messaging that provides a user’s status, personal information, updates and messages in one user interface

This analysis is consistent with the idea that growth in the smartphone market is heavily influenced by network operators desire to push take-up of phones that allow them to sell revenue generating value added services (VAS).

The reality is that demand for smartphones is still very much in its infancy. And in emergine market, where SMS currently dominates, there is little incentive for operators to promote expensive handsets when the revenue per user (RPU) does not extent in any significant way to revenue through VAS.

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