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The future of phone use is group chat and messaging
Jun 5, 2019

The future of phone use is group chat and messaging

And plain old texting is not going to cut it.

Messaging is the future of smartphones. We’re not talking plain old texting, but apps like WhatsApp and Apple’s iMessage that let you send videos, group chat, see when someone is typing and send GIFs and animations. China’s WeChat is the ultimate messaging dream. It lets users do all of that and shop, make payments or order food delivery. That’s what Facebook wants to become with its new plan to combine all its messaging platforms. But most people are still just texting, and that technology needs an upgrade.

One possibility is RCS, rich communication services, which would bring fancy chat features to the texting app on everyone’s phone. Host Molly Wood talked with Sam Barker, a lead analyst following mobile at Juniper Research. He said we might still use WhatsApp or iMessage to chat with friends, but RCS is a huge business opportunity. The following is an edited transcript of their conversation.

Sam Barker: When it comes to the peer-to-peer traffic that everyone uses, I think the operators have almost conceded that to WhatsApp. I don’t think that they’re going to get that back. It would be very, very difficult. But when it comes to the business messaging side of things, the consumers and the enterprises engaging with their customers, that’s where operators will succeed. So the aim for operators is to make RCS as ubiquitous as SMS is now through the native messaging client on the smartphone.

Molly Wood: OK, so I would just interact with the brand directly. I would do my shopping. I would maybe get my customer support. But it does seem like really the future of phone use is going to be messaging, in some form, not so much mobile web or apps even?

Barker: Exactly. We’ve seen users migrate from online browsing through to in-app browsing, and the next step to this would be RCS. It won’t be a case of having a dedicated app per brand or enterprise, it will be a single app you use with multiple contacts. There’ll be a contact in the app that allows you to connect with a brand or an enterprise. You need to contact them first. Unfortunately, they won’t be able to contact you. That’s one of the key requisites in the standards for RCS. From then on you can register in the same way you would do an app and have all the same functionality.

Wood: I like how you say, “Unfortunately, they cannot contact me first.” But, as a consumer, I am great with that. It also feels like that’s going to be a real change. The app economy drives so much revenue. It seems like that could potentially be a real change in the power structure if, for example, Apple is not getting the 30% cut but your mobile phone operator is.

Barker: Yeah, it is a big thing. We do expect a big shift in the ecosystem. Not only is the pricing model up in the air at the moment, the operators are considering moving into the advertising space, and too much advertising does ruin a user experience. It really would be a case, from the operators’ side, of how much, essentially, they can get away with before they ruin the experience of RCS.

Wood: Fascinating. OK, I’m going to ask one follow up question, because I’m feeling like the more we talk, the more I’m realizing that if this actually rolls out and is effective and consumers adopt it, it could profoundly change the mobile ecosystem.

Barker: From a messaging side, yes. It’s been going on for a number of years now. We’ve always said that the technology never really died but never really did take off either. It’s all just been hanging around and waiting for a big catalyst, which was Google. Google came in, they’re getting a lot of other stakeholders on board. The growth is still slow, but it’s a lot faster than it was three or four years ago. There’s a lot more excitement about it.

Related links: more insight from Molly Wood

In 2017, Google combined some messaging into the default Android text app and started pushing the industry to roll out RCS on all phones and carriers. It’s not called RCS, though, because … that’s boring. Google calls it Chat. The Google push is interesting because that company has goofed around with messaging for the last several years, launching chat apps like Allo and video apps like Duo and sort of also having Google Hangouts but not really. But now it’s consolidating a lot of this under Android Messages and hopes to be ready with its full-fledged Chat features whenever all the carriers and phone makers finally get on board with RCS.

It would be amazing if everyone could just use the default app on their phone to do all the cool things like send GIFs that aren’t weirdly compressed or get read receipts or see when someone is typing or group chat or even book a plane ticket without having to download the airline’s app. Let’s do that, that sounds awesome.

But there are some drawbacks. RCS isn’t end-to-end encrypted the way iMessage or WhatsApp is. That means, theoretically, someone with a subpoena could get your phone carrier to decrypt your messages and they could be read, which not everyone loves.

Also, the whole magical thing where we’d all be on the same default app no matter what phone we’re on and what carrier we’re using depends on Apple getting on board and supporting RCS.

Since we know how much Apple loves its own systems at the expense of industry standards, I personally would not hold my breath for that. But like Barker said, Google getting behind RCS is pretty much as strong of a push as the industry is going to get. I guess we’ll see if the future of messaging is going to be owned by a couple of companies or available to all of us.

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