SMS Will Soon Celebrate Its 30th Anniversary – Back to a Unique Case of Technological Innovation.
Often announced as outdated, SMS continues to be successful due to the development of new uses.
Sending an SMS (Short Message Service) is a daily and banal gesture - Europeans send an average of 6 SMS per day - but it illustrates, for the last 30 years, the unique case of an unexpected innovation and the resilience of a basic service whose end has already been announced, wrongly, dozens of times.
Legend has it that the first SMS was exchanged between two Vodafone technicians working on line repairs in late 1992. At the time, the second generation of cell phones was being developed. On December 3, 1992, Neil Papworth, a test engineer for Sema Group (fillable de Vodafone), used a personal computer to send “Merry Christmas” to the phone of colleague Richard Jarvis.
SMS was a text-based exchange protocol for technicians to test networks between two antennas. The idea of making it a service came up in the mid-1990s because pagers were popular with young people.
However, the first studies were not very encouraging: a telephone is made to talk, not to write, we could hear at the time!
The success of use was quite fast and quickly reached unexpected heights ... so much so that SMS was accused of having killed the greeting card market. In 2003, this service, which was not wanted 5 years ago, generated more than 1 billion euros of income for the 3 French operators. However, the end of SMS was announced very quickly, because the basic use was going to disappear in the middle of the 2000s, replaced by the new messaging services appearing on the smartphones that were emerging.
And yet, despite the first Messenger and then WhatsApp and other social networks, this is still not the case. To understand, we have to distinguish 3 uses for SMS.
The historical one of sending messages from person to person has grown worldwide until 2012 to reach 8,000 billion messages. It has been decreasing since then but without disappearing (5,000 billion messages in 2021). The explanation is twofold: SMS remains the easiest messaging to use without any application to download, a simplicity that still appeals to the United States, which accounts for a quarter of global usage. At the same time, emerging countries, especially those in Africa, are heavy users of SMS.
The SMS market is still worth 40 billion dollars per year. The interesting phenomenon is that it is now overtaken in value by the market (60 billion dollars) of “application to person” SMS. These are the 2,000 billion SMS sent by applications. A true marketing channel, it first developed with advertising SMS and then also with more transactional SMS and is therefore becoming a key element in customer relations. The use of applications related to the COVID-19 crisis has contributed to reinforcing this boom (e-commerce, government messages) coupled also with the fact that SMS is natively very secure, hence their role in transactions.
According to a Gartner study, the read rate of an SMS is 98% and the response rate is 45% ... No other digital channel has had such success.
The story of SMS is not over yet, as a third category is growing: payment-related SMS. Well-known in Europe via game shows, donation appeals, or parking tickets, SMS is also set to develop as a digital channel for mobile payments, especially in emerging countries.
SMS is therefore a special case in the history of digital innovation: originally developed for non-commercial use, and not even thought of by users, quite high prices ... Given for dead 20 years ago, it continues to grow with new uses, and despite its weaknesses (ergonomics, few features compared to other messaging) which are offset by its advantages (simplicity, data security). It remains a unique case due to its worldwide success.
Finally, in these times when energy impacts are carefully monitored, it remains the greenest digital messaging system.
