Smart SpendingSmart Spending

The decline and fall of texting

The number of traditional SMS text messages has dropped for the first time ever, hinting at a major shift in mobile communications.

By MSN Money Partner Nov 15, 2012 2:31PM

This post comes from Quentin Fottrell at partner site MarketWatch.


MarketWatch logoOne of the ironies of cellphone use in recent years has been the decline of voice minutes in favor of text messages and emails. Phone calls became a secondary function of phones. But now Americans are sending fewer texts as well, leaving some to wonder: What are people using their phones for?


Woman Sitting in a Cafe Texting © Stephen Morris, Vetta, Getty ImagesFor the first time ever, the number of texts sent by U.S. customers dropped, according to a report published this week by Chetan Sharma, an independent mobile analyst and consultant. Though the decline is slight -- down 3% to an average of 678 texts a month in the third quarter -- it hints at a major shift in mobile communications.


As the traditional SMS text message falls out of favor, all those LOLs are probably just moving onto other platforms, such as Apple's iMessage and other services that send missives over the Internet, experts say. "Customers are moving onto more advanced ways to text," says technology analyst Jeff Kagan.


Free apps like Viber, Jaxtr SMS and iMessage offer more features than traditional texts and tend to be cheaper to use.


Texts represent a major source of revenue for wireless carriers, which sometimes charge as much as 20 cents for a single text message -- transmissions said to cost the companies just a few cents.


In fact, earlier this year, AT&T CEO Randall Stephenson expressed his concern about the decline in text messages. "You lie awake at night worrying about what is that which will disrupt your business model," he said. "Apple iMessage is a classic example. If you're using iMessage, you're not using one of our messaging services, right?" (AT&T's wireless-data business remains "robust" and saw an annual increase of 18% to $6.6 billion in the third quarter of 2012, according to Mark Siegel, a company spokesman.)


The rise of hybrid voice/instant messaging services may be another death knell for the humble text. Google Voice allows subscribers to send and receive free text messages on their mobile phones as long as all texts are sent and received through each user's Google Voice number rather than the number provided by the carrier. Google Voice users can also send free texts by speaking into the phone.


Likewise, Apple's voice-activation service Siri will transcribe voice messages via iMessage -- but only if the recipient has iMessage installed too.

"There's less need to spend an extra $20 or $30 a month on text-messaging plans," says Linda Barrabee, an analyst with market researcher NPD Group.


Since messaging is now being done over the Internet, wireless carriers are looking for ways to milk more revenue out of data plans, experts say. "Texting has been a very profitable business for the carriers," Barrabee says. Verizon Wireless and AT&T are phasing out unlimited-data plans and, earlier this year, introduced shared-data plans with unlimited talk and texting. Sprint and T-Mobile, meanwhile, still have unlimited-data plans.


What's more, data is getting more expensive. Faster 4G LTE connections will boost data usage to 1.2 gigabytes a month from 500 GB on slower 3G connections, according to Validas, which analyzes wireless bills.


But consumers are getting savvier at managing their data usage, experts say. Some 80% of Android and iPhone users accessed their data over Wi-Fi in September, according to a recent report by the NPD Group. They are more dependent on their smartphones and using them on Wi-Fi, Barrabee says. In May, Time Warner, Comcast, Cablevision, Cox Communications and Bright House Networks teamed up to offer their customers access to more than 50,000 Wi-Fi hot spots.


More on MarketWatch and MSN Money:

Nov 16, 2012 7:59PM
The purpose of texting is to have a conversation without those around you being able to hear.  Personally, I hate having a conversation by text.  I use texting for a quick note or info to someone.  Otherwise I call.  And I don't have or want a smart-phone either.  I like my extra large computer screens - I can't deal with a little tiny screen on my phone.
Nov 16, 2012 7:58PM
Obamanomics will put a tax on every single electronic communication and then they'll tax food stamps ten percent - if you used to get ten stamps in a book, next month Barry will only be sending nine.  Somebody's got to pay for his spending binge. 
Nov 16, 2012 7:14PM
In jurassic park part 3  billy is trying to impress alan grant (Sam Neil) with the  latest technology on scanning which dr granr replies."I like the abacus Billy."I'm with you doc.
Nov 16, 2012 5:41PM
Texting is the prime example of how dumb Americans have become. You are typing on a phone, need I say more?
Nov 16, 2012 4:47PM

What are people using their phones for?


Youtube or porn (take your pick).

Nov 16, 2012 4:27PM
I have 2 adult daughters that I prefer to text.  I have stuff to do, all they want to do is talk.  Testing is just more efficient so I can live my life instead of listening to someone blabber on about nothing.
Nov 16, 2012 4:07PM

Text is old and price should be almost nothing after 2 decades. wireless phone carriers are no better than ma bell and find new excuses every year to increase rates.

Used to be technology would make it better for cheaper and better. Still have dropped calls, poor reception and same high rates and fees

Nov 16, 2012 2:45PM
It sounds interesting. Is there a book available on how to learn texting?
Nov 16, 2012 2:36PM
I eliminated my landline, only have a cell phone, and 75% of my phone communication is text messaging.  The only reason to call someone is to have a conversation.  When you send a text, they always get it, and they get the info without having to dial their voicemail, call you back (assuming you're able to answer), and go through the polite hello, small talk, and goodbye spiel.  Texting is usually a more efficient way to communicate.
Nov 16, 2012 1:55PM

Additional charges for texting are just another way to extract money from your wallet.  Voice calls typically last about 3-5 minutes, but texts are sent and received in just milliseconds, freeing the carrier's equipment for other users.

Nov 16, 2012 1:13PM

We went from writing letters (non-verbal communication), to the telephone (verbal communication),

to text messaging (non-verbal communication). How is this progress?

Nov 16, 2012 1:05PM
I sent texts because it's faster than calling someone.  But I do see people texting back and forth nonstop, for that I don't know why you just don't call and have a normal conversation instead of texting back and forth.
Nov 16, 2012 1:04PM
If you just HAVE to overuse technology, how about a voice-to-text function on the sending end, and a text-to-voice on the receiving end? Or, you could just talk, even on speaker or hands-free. I was unhappy that the last phone I got, bottom of the line, wasn't available without a camera. I want a phone, not a low resolution camera, fax, computer,video game, etc. Swiss Army knife type gadget.
Nov 16, 2012 12:59PM
"There's less need to spend an extra $20 or $30 a month on text-messaging plans," says Linda Barrabee, an analyst with market researcher NPD Group."

More like Zero need to spend extra if you actually shop around for the right plan.
Nov 16, 2012 12:54PM
I don't have a smart(?)phone. I take a cruise holiday every year. Coincidence? I think not.
Nov 16, 2012 12:12PM
this must be a commercial for Apple,  like 8 or 9 times this article mentions Apple or iMessage
Nov 16, 2012 12:02PM
SMS is simply more efficient. Most people I know can talk for fricking ever so I like to use it for the "on my way" or "grab chicken while you are at store". Sure, I like to talk to family and stuff on the actual phone, but my dysfunctional friends ramble so SMS is it for me.

Also, my phone is so much more. I use it for product reviews when shopping, price comparisons, GPS maps, I use it on my lunch hour to watch The History Channel in the break room. I usually save my reading of actual books until night time when I am in bed.

For being a 30 something in this day and age, a smart phone is the way to go. Keeps me connected and actually has saved me money. I have been at a department store and was going to by some clothes but googled them first and found a store two blocks away had same clothes and a 50% off everything sale. That one purchase paid my phone bill that month.
Nov 16, 2012 12:01PM
Perhaps Americans are realizing now that you need to do your social networking FACE TO FACE !
Nov 16, 2012 11:34AM
Isn't texting free now?  I don't think I have paid extra for it since 2008.
Nov 16, 2012 11:33AM
Texting is great.  It is kind of wild that people say "Why not just pick up the phone and call?"  I would bet that people were saying "Why not just sit down and write a letter?" 100 years ago.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.