The Future of Mobile Phones: Instant Messaging Meets SMS

LOOSE WIRE By JEREMY WAGSTAFF The Future of Mobile Phones: Instant Messaging Meets SMS November 3, 2006

Wandering around a recent mobile-phone expo in Singapore, I was overwhelmed by a sudden desire to collapse in a heap on the floor. It might have been the heavy load of conference papers and trade magazines I was carrying, but I think it was more the dull realization that for all the progress mobile phones have made, we still don't really understand what we're dealing with. Mobile phones, for all their whiz-bang-ness -- music, cameras, TV -- are at their core still a simple communication tool. It's why we love them. So why has so little changed?

Take SMS, also known as short messaging or texting, for example. At a similar mobile-phone expo six years ago, everyone was telling me that we'd soon be sending photos, video clips and multimedia messages via an enhanced version of SMS called MMS. In fact, SMS still dominates nonvoice mobile-phone revenues, while MMS has been a big disappointment.

The problem is that most providers in the industry don't seem to understand why SMS is so popular. It's not evidence that there's a big market for fancier services than SMS; SMS messages work for the very reason that they're not fancy. I can send an SMS message to more or less anyone anywhere in the world who has a mobile phone, and be pretty sure that they'll receive it and, because it's simple text, that they'll see it as I intended it to be seen.

But cellphone manufacturers need to make money, so they're selling us fancier gadgets with lots of bells and whistles, some of which we actually use. Mobile operators realize they have to try to make some of these extra services work (such as mobile TV), although they still aren't clear how they're actually going to make money out of them. On top of that, with more of us accessing the Web on our cellphones, they are terrified that they'll just become a commodity business like Internet service providers.

It isn't surprising, then, that SMS remains the big hope for the mobile industry. Now the idea isn't necessarily to build a more sophisticated service atop SMS, but to improve on the existing service. There are several competing visions of how to go about this, but they share a similar idea: Because we're kind of wedded to them, our phones could actually do a lot of things better than our computers.

So how about, for example, grafting SMS onto its similarly successful Internet cousin. Instant messaging -- sending short text messages in real time to buddies on the same network -- is hugely popular, and not just among teens. Quite a lot of businesses rely on it. Now a number of mobile-phone service developers are hoping to convince operators that mobile instant messaging, or MIM, is their savior.

It isn't a bad idea. One appeal of instant messaging is the idea of presence -- you can tell whether your buddy is online, busy in a meeting or eager to chat, before you actually send him a message. Imagine you could tell all your buddies that you were in a meeting, simply by switching your phone to silent -- your MIM icon would immediately indicate that you were unavailable. This is a feature included in software from United Kingdom-based Followap Inc., whose representatives are in Singapore trying to persuade Asian carriers to adopt its service. And it makes sense -- in a way. The idea of presence is useful when we're sitting at our computers, but might be more useful with our mobile phones, since they move around with us, allowing us to give all sorts of new information if we want ("bored, in the mall," "tired, still waiting at the luggage carousel," "framed, about to enter prison" or whatever).

Instant messaging and presence now are increasingly intertwined on the Internet with voice calls, through free or cheap services such as Skype, the Luxembourg-based Internet phone service owned by eBay Inc. of the U.S. But as mobile-phone networks get faster at handling data, and phones begin to include the capability to switch from the expensive cellular network to cheap or free wireless or WiFi networks, the three elements -- messaging, presence and voice calls -- are going to fuse further. So while Skype has been a little slow in making its service available on all mobile devices, other developers have sneaked in, including U.K.-based Barablu Ltd., which offers Skype-type software that allows free voice calls between WiFi-enabled-phone users, and cheap calls to traditional networks. Barablu Chief Executive Pascal Isbell is at the expo to convince operators to offer his service to their customers. "If they don't do it," he says, "others will."

Another option: Netherlands-based LogicaCMG PLC, whose products store and forward two-thirds of the world's SMS traffic, believes that to make money, carriers need to look at their customers differently. Already, says LogicaCMG's mobile-messaging marketing director Steven van Zanen, operators know each customer well, since they handle all those customers' traffic. Mining this traffic -- including usage patterns, location and contents of SMS messages -- could help them provide more tailored services to individual customers. "People want the killer application after SMS," he says. "But in fact it will be determined by the individual."

For sure, the mobile phone could be a lot smarter than it is -- not so much in terms of features, as in how it connects me to my friends and data. But having trampled these expo corridors of undelivered promises a few times before, I'm not jumping up and down quite yet.