Mobile Apps May Be Reaching A Saturation Point, SMS Still Reigns Supreme

Though mobile apps seem to be all the rage at the moment, it’s suggested that it may be reaching a tipping point in terms of saturation, allowing other mobile communication, and primarily SMS, to remain the solid choice for mobile marketing dollars. An article posted...

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Mobile Apps May Be Reaching A Saturation Point, SMS Still Reigns SupremeThough mobile apps seem to be all the rage at the moment, it’s suggested that it may be reaching a tipping point in terms of saturation, allowing other mobile communication, and primarily SMS, to remain the solid choice for mobile marketing dollars.

An article posted on AdWeek today makes a strong case against mobile apps, citing several reasons why the excitement surrounding the concept may be a little premature and why SMS remains the clear leader in terms of mobile marketing spend.  “Don’t get me wrong.  Mobile apps can be a great way to engage in the right context, but the reason that text continues to be the dominant force in mobile marketing is simply reach and usage,” the author explains.

The logic is hard to argue with; nearly every cellphone in the U.S. is capable of text messaging and because it’s used for regular personal communication, it’s always top of mind in terms of general daily use.  By comparison, only 18 percent of all phones in the U.S. are smartphones.  Further, Juniper Research forecasts that smartphones worldwide will account for just 23 percent of all new handsets sold per annum by 2013, hardly representing the mass market for general consumer goods and services.

Mobile apps are dominated by the iPhone, with most development going toward its platform, which only represents 4% of the entire mobile market.  With such a frenzy for mobile apps, competition is rampant with very few avenues to distribute, apart from Apple’s App Store which has the most competition of all.  Because of it, the mobile app market is beginning to be saturated.  SMS, on the other hand, has none of these limiting attributes.

“Strategy Analytics confirmed that only four to six mobile apps are used on a consistent basis. Brands need to be aware that there’s intense competition for share of the mobile phone desktop,” the article explains.  “It stands to reason that consumers are not going to continue to download and use an unlimited number of mobile applications, and there are many questions over whether we have reached the saturation point already.”

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5 comments

  1. Christopher

    I feel that by far SMS has a higher response/usage rate than any other Mobile application, thats why I started working on one and I just finished developing an SMS powered application, for sale/rental. Its catering for ads in sports, Foreign Exchange rates, weather updates, Utility bill inquiries, newsletters, opinion polls, prize/draw competitions and customer product/service updates.

    Please feel free to contact me in case you would like to use it:

    Regards,

    Christopher

    simusokwechristopher@gmail.com

  2. VA

    We all know that today’s generation has essentially become the iWantiT generation and is influencing everything we experience.

    I realise that numbers do not lie and that iPhone may only represent 4% of the mobile market (as quoted by Simon Vella). But there is nothing similar to the iPhone, which is attention grabbing, serving an emotional purpose and feeding to the ever so needy the new generation ‘I’.

    Coming back to the topic of contention, whether SMS is here to stay or not; yes most certainly it will, but only as a means of text based communication. To use SMS as a text based marketing tool was a fantastic idea about 5 to 7 years ago, when handsets could not support multimedia WAP enabled messages, when 3g didn’t exist or Wi-Fi was not available to a consumer on the street.

    I live in Australia, where the price is SMS is not dropping. Telcos are providing bundled voice+data+SMS plan options, but the cheapest SMS is still around 20 Aussie cents. There is not much margin for them, when they sell voice and data, hence to need to have a higher SMS price. Here we have late night advertising for adult content through premium SMS (usually A$5 per SMS/MMS). Basically you send a SMS to a 19XXXX (shortcode number) with a keyword and join a weekly subscription. This is a great business model, but it is not sustainable because people after registering, soon get massive phone bills, not realising that each time they get a message back, they are charged something like $5 a hit! There have been thousands of cases, where customers have complaints lodged with the Dept of Fair Trading etc. This typically leaves a bad taste with the customer and scars them and their friends from ever subscribing to any SMS powered application. Even if they customer is happy with the T&Cs of a subscription based ringtone service, he or she could probably create their own ringtone for free, if they choose to download a ringtone maker app.

    Secondly with a single app download customers know that they only need to pay once or download a free lite version. They may get bored and not use the app after the 10th time, but atleast their experience was rich, chic, made them look cooler and made the possibility of recommending it to a friend higher, when compared a SMS based app.

    The question I have is what is the rest of the mobile market (driven by Windows Mobile, Symbian or Andriod) doing? How come Microsoft hasn’t come up with an answer to Apple’s app store? Or a Andriod app store? I think the reason for that is that no one is listening to what the consumers who use HTC, Samsung, Nokia etc, really want and desire or they just think it’s too hard and have their heads in the sand.

    I am not a Apple promoter and I am definitely not a MAC user but I think the guys up in Apple are doing some creative thinking and ‘listening’ to what the market will want next! Whether it is clever marketing, UI design and promotion, with the iPhone, Apple have got something right. And the best (scary?) part is that they are not stopping at that, they have re-invented the iPhone and created the iPad, which is creating a storm in the mobile app market. They have very meticulously created a segment based on NEEDS & WANTS and are not shying away from exploiting it.

    What SMS is doing is Everything For Everyone. Sure, it has reach and potential, but it is missing the marriage between the right app / marketing method for the right customer! The basic rule of marketing is that you have to have clearly defined segments. Doing a lot for many people is going end up in your key value proposition misinterpreted in innumerable ways.

    – VA

  3. Mobile Marketing Platform

    I agree with Jason, SMS enjoys a very high open rates something applications and impression advertising does not (I believe the click through rate on apps is somewhere lower then 0.5%).

    At the end of the day every channel of mobile marketing will have its characteristic users and uses. Text is here to stay and currently is the preferred channel for advertising.

    The price of SMS is also dropping, as the industry consolidates (smaller companies go out of business, aggregation is consolidating too) the purchase power of the larger players increases and the base cost drops… Drop in cost improves the ROI which is another factor that works very well for SMS.

    To learn how you can save on your SMS traffic, feel free to contact me:

    Noam Samson
    nsamson@cellforce.com
    Cellforce.com
    954-509-3811

  4. Jason Kobrin

    Great article Justin.

    We look at mobile messaging, specifically SMS as the “mobile landing page”. SMS is the gateway to drive consumer behaviors and create engagement with the brands consumers want to hear from.

    The ubiquitous nature of SMS gives companies the largest reach (250,000,000+ people in the US) and while it is not a “bright, shiny object” (iPhone, BlackBerry apps), it is the most effective way to consistently reach your customers. With SMS open/response rates in the high 90% range, it is a clear indicator that this medium is the best method of reaching consumers, without requiring additional downloads.

    Jason Kobrin
    jkobrin@3cinteractive.com
    3Cinteractive.com
    561-886-4847

  5. AB

    Lets keep a little perspective… aside form it being an opinion piece by the CEO of an SMS marketing company, the context here is way off.

    Just because they share the same channel, does not mean that it one is better than the other. There are great apps, bad apps and everything in between like there are SMS campaigns.

    I agree re: coverage, but arguments about share of desktop, consistent use of apps are well off… in essence trying to blame the handset etc for laziness of the content providers.

    There is no ‘one king for all’, as evidenced by mobile apps that get delivered via SMS. 🙂

    AB

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