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Q: SMS (Mobile two-way messaging) Market in the U.S. ( Answered 5 out of 5 stars,   0 Comments )
Question  
Subject: SMS (Mobile two-way messaging) Market in the U.S.
Category: Business and Money
Asked by: hinrgmike-ga
List Price: $10.00
Posted: 20 Sep 2002 15:33 PDT
Expires: 20 Oct 2002 15:33 PDT
Question ID: 67406
What are the primary reasons that non-adopters choose not to use SMS
(mobile two-way messaging) in the United States (with any survey
results, statistics, etc. that can be cited)?
Answer  
Subject: Re: SMS (Mobile two-way messaging) Market in the U.S.
Answered By: lot-ga on 21 Sep 2002 16:55 PDT
Rated:5 out of 5 stars
 
Hello hinrgmike-ga

With the arrival of MMS and picture messaging, will SMS catch up? 
Anyway, I have researched some information from various sources below
as per your request.

Excerpt:
"Text messaging has been the rage of Europe and Asia for several
years. There are a lot of reasons cited for this. Chief among them is
the fact that text messaging was and is far cheaper than making voice
calls in those areas. Another factor is that mobile phone services in
those areas all supported SMS from the outset, while SMS was not an
integral part of many of the mobile phone technologies deployed in the
United States..
applications for text messaging will become available that will drive
its adoption in certain vertical business markets. However, it will
never become mainstream in the U.S. because most people will never buy
a phone with a keyboard or another rapid text entry device. The
maximum length of text messages is also so limited, that only people
with a creative streak will find it useful.
The accepted wisdom in the mobile communications industry says that
young people in the U.S. will adopt text messaging because that is the
demographic that drove its adoption in Europe. However, in Europe
there were many fewer home computers connected to the Internet than
there were in the United States at the time SMS started to become hot.
In the United States, Instant Messaging became the preferred
technological outlet for spur-of-the-moment message sending among
young people.
No amount of advertising by wireless service providers is going to be
able to generate similar levels of interest in text messaging here.
You just don't create a market for text messaging by saying how cool
you are if you use the service. The service has to fulfill an unmet
need.
Cyber cafes are widely used in the developing world, why not here?
Ever heard of ISPs? Ever heard of broadband to the home? Nobody went
to cyber cafes in America because they had Internet access without
leaving the house. Nearly everyone who wants email-like messaging
already has it in the United States. Why should the mainstream embrace
text messaging services now?"
"U.S. Mobile Phone Users Are Laggards in Text Messaging" by
dave_aiello on Sep 2, 2002 CT Data
http://www.ctdata.com/mobile/2002/09/02/204218.shtml

Excerpt of another viewpoint:
" I would not blame the lack of SMS use in the U.S. on the cellular
operators. The evolution of technology has been much different here.
There are millions of short message users in the U.S. The biggest
blocks are IM (instant messaging) users on desktops followed by users
of the RIM and Palm handheld devices on the Cingular Interactive and
Motient wireless networks. The U.S. market is more complex than Europe
with many choices for messaging. I counter and say that the U.S. is
ahead of Europe in messaging. The difference is that the cellular
operators are not the providers in the U.S. The European perspective
centers on GSM and fails to take into account the penetration of PCs
(with IM on them) and the alternative wireless networks in the U.S.
(CDPD, Cingular Interactive, Motient)."
Reader comments, by Barney Dewey Feb 5, 2002, Andrew Seybolds group,
LLC Outlook 4 Mobility
http://www.outlook4mobility.com/NewsAnalysis/feb502.htm

"To date the most successful data technology for wireless has been
SMS. SMS is wildly successful in Europe and Asia. There are whole
subcultures in Europe and Asia that revolve around SMS. The majority
of Americans do not use their cell phones for anything other than
voice. SMS is a neglected technology in America. While there are over
750 million SMS messages sent daily worldwide, Americans send less
than 10 million of them. Americans are unfamiliar with SMS and do not
seem to be that interested in wireless data yet. Unfamiliarity,
cultural differences and widely available e-mail are all factors in
the slow adoption rate of SMS in the US. According to the Yankee
Group, there are over 65 million SMS capable phones currently being
used in the US. This largely untapped market within the US is a
potential gold mine for wireless carriers."
"Introduction to SMS" Wustl.edu
http://students.cec.wustl.edu/~mjc1/project/introSMS.htm

Excerpt of Imran Qidwai's top ten reasons for low SMS adoption in the
US:
"1 ]
Other messaging alternatives:
-PC availability:
At work
At home
Internet connectivity and costs:
Dial up
Cable modem penetration
DSL penetration
-Email ubiquity:
Work email
ISP access at home and on web anywhere
Free Hotmail, Yahoo!, others
-Popularity of cost-free IM: AOL IM, MSN, Yahoo!, ICQ
2 ]
Until 2nd half 2001 there were few handsets enabled for 2-way SMS
(mobile originate):
-AT&T Wireless: 55 percent to 60 percent of handsets are two-way
enabled now (250 million to 300 million SMS messages transmitted in Q1
2002)
-Cingular Wireless: 60 percent of handsets are two-way enabled now
(200 million messages transmitted in Q1 2002)
-VoiceStream Wireless: 100 percent of handsets are two-way enabled
(200 million to 300 million SMS messages transmitted in Q1 2002)
-Source for all numbers: EMC estimates (Wireless Week, June 3, 2002)
3 ]
No cost advantage:
-Voice minutes relatively cheaper in US than in Europe
-Low user motivation to switch to alternative “cheaper” text messaging
-“Charge-back” billing for text messages, where recipient pays* for
all messages:
-Problem: others control that recipient gets messages, but recipient
liable for charges
-Many users would rather not turn on SMS service fearful of unwanted
messages and Spam
-If someone else (sender) was paying, people may be more receptive to
getting messages
*True for most carriers in the US
4 ]
Pricing complexity:
-Models vary significantly between carriers
-Cost of each received message
-Cost of received messages by Bytes
-Cost of sent messages
-Cost of Internet connection – users of some carriers send messages
using this method
-Few people fully understand how they are charged for data by their
carrier, or at least what it means for actual usage
5 ]
Convenience (or lack thereof):
-When mobile, and more likely to use SMS on phone, people spend more
time in cars – lack of opportunity to type/read message on handset
6 ]
No compelling applications:
-Most focus is on Person-to-Person (P2P) messaging
-There is little interesting “content” other than Stocks, News,
Horoscopes, …
7 ]
Missing network effect:
-The more people you know you can send text messages to, the more
likely you are to do so
-Mobile phone penetration across total population:
-Approx. 70% in Europe
-Approx. 40% in US
-This is one area where carrier inter-operability will probably help
8 ]
-Lack of aggressive marketing of SMS by operators
-Focused on selling voice minutes (reason: see CTIA numbers)
-In 2000-2001 many users of mobile phones did not know:
-they had text messaging on their phones
-how to use it
-how to get messages
-how to send messages to someone else with a mobile phone
-how they will be charged
9 ]
Closed carrier networks:
-Due to fear of recipients complaining about being billed for Spam and
unwanted messages, carriers did not allow enterprises or content
providers to send high frequency of SMS messages through their
networks
10 ]
Higher penetration of mobile phones in 25-50 year olds:
-Voice is more important function of telephone than short text
messages
-People don’t like to type any substantive amount of text on phone
keypad
-European data substantiates this, where most SMS users are younger
> Summary of Reasons 
-Some are inter-related and not discrete
-Most are very basic for success of any product:
-Availability of alternatives
-Cost
-Convenience
-Availability
-Awareness
-Fear of uncertainty – charges, coverage, reliability
-Lack of compelling reasons"
from "SMS in the US, What is Holding it Up?" by Imran Qidwai (Director
of Messaging Products) NMS Communications, Jun 11, 2002 MIT Wireless
Forum
http://216.239.39.100/search?q=cache:ZKB6u2dPVnMC:www.mitwf.org/images/jun02/imran.ppt+sms+low+adoption&hl=en&ie=UTF-8

Search Strategy:
sms laggards
://www.google.com/search?q=sms+laggards&hl=en&lr=&ie=UTF-8&newwindow=1&start=100&sa=N
sms low adoption
://www.google.com/search?q=sms+low+adoption&hl=en&lr=&ie=UTF-8&oe=utf-8&newwindow=1&start=20&sa=N
sms "slow adoption"
://www.google.com/search?q=sms+%22slow+adoption%22&hl=en&lr=&ie=UTF-8&oe=utf-8&newwindow=1&start=70&sa=N

I hope that helps, if you need any clarification of the answer just
ask.
Kind regards
lot-ga
hinrgmike-ga rated this answer:5 out of 5 stars
great answer. Realy appreciated the supporting web search strategies,
web links, article abstracts, and so forth. Thank you!!!

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