A Teenager's Dream: An iPhone App for Free Texting
A recently released app that offers free text messages on the iPhone is welcome news to parents of teenagers upset over the cellphone bills of their hypertexting children. But can it be a sustainable business?
Context & Ripple Effects
The app addresses a cost problem already visible in teenagers' outsized texting bills, making the iPhone relevant not only as a handset but as a way to bypass a metered mobile service.
Its timing matters because iPhone and Android users generated nearly three-quarters of mobile-web browsing in April 2009 despite accounting for less than 10% of device sales, concentrating app-based behavior among a relatively small smartphone audience.
First-order effects
- Teen iPhone users and their parents gain an alternative to carrier-billed text messages, directly targeting the bill shock associated with heavy texting.
- The app's developer must turn a service with no user texting charge into a durable business, placing monetization rather than initial consumer appeal at the center of the product.
Second-order effects
- Mobile carriers face a new substitute for paid texting among iPhone users, even as iPhone usage is already increasing demands on AT&T's network.
- The value of an iPhone data connection rises relative to individual messaging charges, giving consumers another reason to judge mobile plans by data access rather than texting allowances.
Third-order effects
- If app-based messaging spreads beyond early smartphone users, messaging can shift from a carrier-controlled, per-message service toward software delivered over the data connection.
- That shift would make the economics of mobile messaging depend more on app monetization and network capacity than on texting fees.
The trend: Smartphones are beginning to unbundle carrier messaging by moving communication services into applications that run over mobile data networks.