Messaging applications and services are big businesses these days - at least in terms of the number of regular users of the services. Not so long ago, most were simple text message services designed to help users exchange messages across the world quickly and cheaply, but many have evolved to include the ability to share pictures, videos and voice notes. Some include integrated voice and video calling, and a number now include a whole ecosystem that sits behind the chat engine, providing users with a rich experience and developers with their own platform and associated tools. Instant messaging applications have recently overtaken social networks as a platform and have caught the attention of businesses and marketers, partially because of the size of their audience but more for their regular usage rates and retention. In short, once a customer starts to use a messaging application and enjoys the interaction with other customers, he or she is likely to stay using the platform.
The reason why instant messaging applications and services are the most popular smartphone tool is because smartphones are based around keeping in touch with people. Many businesses have realized this and for those instant messenger services that are yet to develop their own platform and ways to monetize the service, this appears to be a matter of time. The majority of instant messenger service users are young and usually technologically proficient, which is one of the more important cross sections of the population for advertisers and businesses to market to. Looking forwards, we do not expect any changes in the trend of instant messaging services as being the most popular smartphone tool: growth is being fuelled by falling data costs, as data is necessary in order to connect to the service. We are seeing significant network improvements across the developing world, which is driving rapidly increasing Internet adoption. Similarly, smartphone prices are also falling - today's inexpensive device is considerably cheaper and more capable than a low end device from 2013. This trend is set to continue; 2017's devices are expected to be incrementally more powerful and less expensive than 2015's devices, and are set to become the primary means of connecting to the Internet for much of the world.
We have seen a number of the Asian messaging applications (WeChat, KakaoTalk and LINE) successfully rolling out an underlying platform, which gives customers the ability to order shopping, taxis and gifts from the messaging application. By monetizing the instant messaging application, these businesses have created an addictive and growing service. The Asian instant message businesses are leading the Western messaging applications in this respect, but this fact is not lost on the WhatsApps of this world. The next stage in the development of these instant messaging applications is building out their own additional products and services.
One of the changes we are expecting to see in the coming months is more and more businesses changing where they invest their online presence, reducing exposure to the social networks of this world such as Facebook and Twitter, and more towards messaging services. The trend of more and more people spending their smartphone time on instant messaging clients looks set to continue.