Monday, May 20, 2024

    ANALYSIS How Apple’s RCS move changes RCS – and SMS’s – fortunes

    With Apple announcing on 16 November 2023 that it was, after all, going to support Rich Communications Service (RCS) messaging the world of business messaging changed dramatically. But what does that look like? We asked Molly Gatford, Research Analyst at Juniper Research, for her thoughts.

    The impact on messaging markets

    The increase in the price of SMS has resulted in enterprises paying higher prices for mission-critical messages such as MFA (Mult-factor Authentication) and OTPs (One-time Passwords). The rise in AIT fraud is culminating in revenue losses for operators, as enterprises seek other alternative authentication technologies that provide greater value. The availability of other channels for authentication, such as OTT business messaging and flash calling, will continue to threaten overall business messaging revenue. However, as RCS becomes a more universal messaging channel, this will be a key method to combat operator losses.

    RCS basic messages will play an important role in increasing the adoption of RCS by enterprises initially, as these messages have price parity with SMS with the increased functionality of RCS messages. However, to grow RCS business messaging against the threat of OTT messaging, rich media capabilities, such as images and carousels, must be promoted.

    Unlike SMS, there is currently no standard pricing model between operators for RCS In order for RCS to grow, RCS pricing should reflect the pricing of SMS, with a price-per-message model. This will increase the familiarity of RCS, in a similar fashion to established SMS practices, which will be key to attracting high-spending enterprises that operate on an international scale.


    Global RCS Business Messaging Market: 2023-2028 

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    Global Conversational Commerce Market: 2023-2028 

    The growth of RCS-capable users

    Juniper Research anticipates that following the roll-out of RCS on iOS devices, the total number of RCS-capable subscribers will reach 7.6 billion by 2028.

    Number of RCS-capable Subscribers with and without Apple RCS Support (m), 2023-2028 (Juniper Research)

    Juniper Research has used in-house data on the total number of RCS-capable subscribers, as well as the proportions of Android and iOS devices in each country in order to predict the growth of RCS-capable subscribers globally. This also included data on the operators that have launched RCS in 2023.

    Through the support of the RCS universal profile on iOS devices, this is expected to increase the total addressable market by 36.7% compared to without Apple support, with more than 6.3 billion capable subscribers by 2024.

    The rise in the total addressable market for RCS increases the potential revenue for both CPaaS players and mobile messaging vendors, particularly those that are already established in the RCS market. Enterprises are expected to adopt RCS as part of an omnichannel approach to communicate with their customers. Juniper Research believes that RCS will become a primary channel for enterprises due to the large addressable user base, which will surpass the user base of any OTT messaging platforms.

    The support of RCS on Apple devices will also encourage operators to launch RCS, due to the increased revenue potential. This will further increase the number of mobile subscribers that are capable of receiving RCS messages.

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