If you browse an online app store, you will see that a great amount of the most popular applications are those dedicated to personal messaging. Over the last couple of years mobile users opened up to apps like WeChat, Instagram, Viber and Snapchat. As a result, today millions of people rely on such app services to connect with their family and friends. But how long will personal messaging apps continue to appeal to mobile users? Will they be just one of the many tech trends that, just like a wave, comes with a big splash and disappears before you know it? The truth is that messaging apps are still far from reaching their full potential.
Popularity and Advantages of Messaging Apps
Various researchers conclude that applications for messaging have become one of the most popular app category today. According to the study by comScore, for instance, 4 in 10 mobile consumers in the U.S. alone use an instant messaging app at least one every 30 days. Another research from Flurry estimated that last year the number of messaging app users jumped by the unbelievable 103%. As a result, some of these mobile messaging services are on their way to become or already are more popular than many of the leading social media sites. For example, WhatsApp has over 700 million visitors who regularly use the service. Viber has over 200 million and Line, which is mainly used in Japan, has about 170 million visitors.
These impressive figures are attributed partly due to the rise of smart mobile devices, of course. Smart gadgets offer us constant internet connection and various smart features, including messaging apps. Yet, there are many other alternative services, like email and text messages. However, they seem to stand little chance against mobile applications dedicated to personal messaging. That is not hard to understand. Messaging apps have many advantages, which other platforms cannot offer to users. As a start, they allow you to send almost anything – from text and links to photos and videos. In addition, they are much faster than email services and cheaper compared to texting services provided by mobile carriers. Also, unlike social media websites like Facebook or Twitter, they offer users more privacy.
The Paradox of Private Messaging Applications
Fueled by the rapid growth of private messaging platforms, large technology companies are making million- or even billion-dollar acquisitions of startup messaging companies. For example, Alibaba Group, a Chinese e-commerce giant, bought Tango for $280 million. Last year, Viber was acquired by Rakuten for an even bigger amount – $900 million. Facebook, however, broke all records by buying WhatsApps for $21.8 billion back in early-2014.
You probably assume that messaging apps have already turned into money-making machines. In reality, however, they accumulate rather modest revenue. WhatsApp’s profits reached barely $10.2 million by the end of 2013. That amount hardly covers the nearly $22 billion which Facebook invested in the platform just two months later. This creates an interesting paradox – even though private messaging applications do not impress with their revenue, their market value continues to increase due to the potential they hold for advertisers.
Hidden Value
A key rule in business and investment is that the value of one thing is based not on what it is today, but on what it can be tomorrow. The same rule applies for messaging applications. Once their potential is fully expanded, they could reach unimaginable heights. App developers are already adding more and more features to these platforms. Snapchat users, for instance, can send money to another Snapchat visitor. KakaoTalk messaging app, on the other hand, enables users not only to find new app, but to also share them with their friends. Japan’s Line even supports mobile payments in retail stores.
This illustrates how messaging platforms offer e-commerce companies and game developers a brand new way to promote their products. The capabilities and popularity of these apps is expected to continue at full speed. The only question is: Who will win the messaging apps competition?
