Why Smartphone Users Are Addicted To Apps Like WhatsApp?

by CXOtoday News Desk    Jun 30, 2015

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Smartphone users in India spend 47 percent of their time on communication applications such as WhatsApp, We Chat, Hike and Skype which are key driver of mobile broadband usage, says a report, which adds that Communication apps have a higher dependency on mobile broadband usage.

“Communication continues to be the dominant activity on smartphones. Communication apps are ‘always on’ and are a key driver of mobile broadband usage,” the report by Swedish telecom equipment maker Ericsson said.

“As per our report, Indians spend 47 percent of time using communications apps such as voice, instant messaging, voice-over-internet-protocol (example Skype), emails and social networking on smartphones,” Ericsson said due to their ‘always on’ status.

The report analyzed app usage behavior using on-device measurements across several markets, including India, with a particular focus on how messaging and social media apps influence the way people communicate. The research sample represents Android smartphone users in India, Japan, South Korea, the UK, and the US. In India, 7,500 Android users were surveyed. The report said across the US, the UK and India, more than 30 percent of the time spent on smartphones is spent on communicating apps. “We found that 40-50 per cent of data consumption for communication apps uses mobile broadband, whereas the corresponding figure for video is just 20 per cent,” Ericsson ConsumerLab Senior Advisor Swetleena Swain said. 

There is no shortage of applications for messaging your friends, family, and co-workers, so it’s no surprise that overall traffic in messaging apps is expected to double by 2019. What is surprising is that the revenues will actually drop during the same period, analysts say.

According to a Juniper Research, these over-the-top (OTT) apps such as WhatsApp, Facebook Messenger, and BlackBerry Messenger will be the driving force over the next few years, climbing from 31 trillion messages in 2014 to over 100 trillion in 2019.

The 200-percent increase in usage of alternative messaging apps is largely due to the fact that sending messages on these platforms is typically free. OTT messaging apps like WhatsApp are technically free because they use Internet data for transmissions. Meanwhile, SMS and MMS messages use mobile carrier networks to send messages, so each text adds up to an amount you have to pay each month.

One would think that this traffic increase would generate more revenues for alternative messaging apps, but that’s not the case according to Juniper Research. Revenues will decline from $113.5 billion in 2014 to $112.9 billion in 2019, a drop of $600 million.

These messaging services will certainly cut into the SMS pie, but it’s not all doom and gloom for the mobile carriers. While person-to-person (P2P) SMS messages will likely continue to fade, the use of application-to-person (A2P) SMS messaging are projected to grow. A2P messages are those automated messages sent from a computer to users for medical appointment reminders, confirmation codes, and flight updates, among other things.

With 2019 four years away, there is still time for the OTT messaging apps to figure out how to make money off its growing user base, but it won’t be easy. The $600 million drop doesn’t seem like much since it only represents about 1 percent, but that’s only the breakeven point. Since overall traffic is increasing by 200 percent, the revenue should go up proportionally. Going with a modest increase of 100 percent in revenue yields a target of $227 billion. That is $114 billion over the 2019 estimate, which represents a huge mountain to climb.