If you thought gas prices were rising too quickly, check out what's been happening to text messaging.
Since 2005, rates to send and receive text messages on all four major carrier networks have doubled from 10 cents to 20 cents per message. This percentage of increase is on par with similar price hikes at the gas pump as crude oil prices skyrocket. In 2005, Americans paid on average about $2.27 per gallon for gas compared with more than $4 a gallon today.
Last October, Sprint Nextel was the first to introduce the new price of 20 cents per text message. AT&T and Verizon Wireless soon followed with their price hikes going into effect this spring. And this week Engadget reported that T-Mobile USA will match the other big three wireless operators in jacking up SMS texting rates to 20 cents per message. The price increase goes into effect August 29.
On Tuesday, AT&T announced that texting will cost new iPhone users more than it had previously. The old iPhone plan included 200 text messages in the $59.99 voice and data plan. But plans for the new iPhone 3G that hits store shelves next week will cost $5 extra for 200 text messages, bringing the total price of a comparable voice and data plan on the new iPhone 3G to $74.99 a month. (This is with the $69.99 "Nation 450" bundle plus $5 for the 200 text messages.)
The new wave of price hikes comes just one year after all the major carriers raised individual text messaging rates from 10 cents a message to 15 cents per message.
So what's with the 100 percent price hike in two years? Well, there's nothing that has changed in terms of the cost associated with delivering this service. In fact, text messages cost carriers very little to transmit. And when compared with what carriers charge for transmitting other data services, such as music downloads or surfing the Web, the text messaging rates seem exorbitant.
Carriers limit the number of characters that can be transmitted in a text message to 160 characters. Each character is about 7 bits, which works out to a maximum of about 140 bytes of data per text message. This is peanuts compared with the size of sending or receiving an e-mail or downloading an MP3 song over a cellular network.
One blogger has done the math. If the same pricing was applied on a per-byte basis to downloading one 4MB song it would cost the user almost $6,000 to download a single song via SMS texting.
One can easily assume that the mark-up on a text message is several thousands times what it actually costs carriers to transmit this little bit of data, considering that mobile operators are only charging $30 to $40 a month extra for mobile data plans that offer 5MB worth of data per month.
The reason that carriers are charging so much for text messages is because they can. Even at 15 cents and 20 cents a pop, people are willing to pay for it. The carriers are also trying to get consumers to sign up for text messaging packages and unlimited plans that vary in price from $5 a month extra for 200 messages to $20 a month extra for unlimited texting on AT&T's network, for example.
The massive price markup on texting and the growing popularity of texting have resulted in huge profits for mobile operators. Verizon reported that for the first quarter of 2008, its wireless customers spent $11.94 a month on data services, an increase of about 33 percent from a year earlier. The carrier didn't break out what percentage was spent on text messaging versus other services, but there's a good guess that a lot of the additional revenue from data came from texting. In total, mobile data accounted for about 20 percent of all wireless sales for Verizon's first quarter.
Unfortunately, it doesn't look like consumers have much legal recourse for getting carriers to adjust their pricing to a more reasonable rate. There's nothing illegal about charging as much as the market will bear for any service.
But that doesn't mean that consumers like it. What do you think about the high cost of texting? Are you feeling the pinch in your wallet yet? I'd love to hear your thoughts in the "Talk Back" section below.
Digsby said Monday that the next version of its multi-network instant-messaging software will be better. That's none too soon for those of us desperate for a better multi-protocol IM program.
I'm a very active IM user, and I've been trying Digsby as the latest possible solution to my problem of incompatible instant-messaging networks. However, a brief honeymoon period was quickly replaced by frustration as my computer began freezing up for literally 30 seconds on some occasions upon arrival of a message from a new chat buddy.
According to Digsby, though, a new version could make me happier.
The new version includes a "major reduction in RAM (memory) usage, fixes for most of the memory leaks, (and) a much more responsive user interface," according to Digsby's blog. "We have bunkered down to fully optimize our codebase."
Memory leaks occur when a program doesn't properly release memory it's no longer using, meaning that it gradually takes up more and more memory even though it's not doing any more work.
Now I wish they'd get copy and paste working better too...
Instant-messaging power users, rejoice: a barrier between two previously isolated realms of online chat is coming down.
A minor sidelight in the Yahoo-Google search ad deal announced Thursday is that the two companies "agreed to enable interoperability between their respective instant-messaging services, bringing easier and broader communication to users," the companies said. They're not sharing further details at this stage, but it's safe to bet that means people on Yahoo's IM network will be able to chat with those on Google's and vice-versa.
That's a big step in the right direction.
IM is a useful if sometimes intrusive tool, especially in this day and age when the Internet has tightened ties among co-workers, family, and friends. But people and companies don't always use the same networks, meaning that power users either must run multiple IM programs or try to bridge the divide with multiprotocol packages such as Trillian, Adium, Digsby, Kopete, or Pidgin.
IM today is similar to the early days of electronic mail, when users couldn't send messages between incompatible services such as AOL, Prodigy, and CompuServe. Happily, the Internet's SMTP standard for e-mail emerged victorious, and now we only need one e-mail address (leaving aside the issue of personal vs. work identities, but that's a story for another day).
A power user's plight
I'm one of those heavy IM users tormented by today's situation. I have to talk to people on Windows Live Messenger, Yahoo Messenger, AOL Instant Messenger, and Google Talk. It's a pain having separate usernames for each service, but much worse is looking for software that centralizes IM for me.
I recognize I'm not a representative sample of the population at large. I have 797 buddies, many of them the same people represented on multiple services.
AOL said in a statement, in effect, that I am indeed an anomaly. "We have no evidence that interoperating with other consumer IM services is of great interest to AIM users," the company said.
But I've seen the problem worsen in the years I've used IM, and I believe mainstream people will encounter this problem with greater frequency as they change jobs, graduate from schools, meet new friends, and otherwise expand their social horizons.
Walled gardens
There are signs that these days are numbered. As Internet companies race to build rich communities and services on the Web, "walled gardens" have become widely disparaged as a relic.
Yahoo, for example, has pledged to expose formerly closed parts of its business through its Yahoo Open Strategy. And AOL is opening up AIM some, for example, letting Meebo and eBuddy link up.
But it'll take awhile to convince me that the IM walls are truly coming down.
For one thing, most of the progress to date has been through interoperability agreements that permit one service to link with another. That's like CompuServe building a custom gateway to translate and route e-mail from AOL--helpful, but symptomatic of the larger problem. The more IM services there are, the more gateways each service needs to work with the others, and more services are cropping up as companies such as MySpace, Skype, and Facebook add chat abilities.
What we really need is an IM communication standard. The obvious candidate is the XMPP protocol on which Google built its service but that none of the other major players use.
Google, unsurprisingly, shares my view. "The Web is based on open standards and protocols so users can use any browser on any operating system to visit any Web site. We think the open Web model ought to apply to IM," Seth Demsey, senior product manager for Google Talk, said in a statement.
Of course, it's a lot easier for underdogs to endorse standards, and Google has 1 percent share of IM users worldwide, according to ComScore figures in April.
Interoperability isn't easy
To be fair, IM interoperability isn't an easy technical problem to tackle for mammoth services with millions of users and messages. There also are privacy issues when one service is sharing data and buddy lists with another.
More complicated are higher-level features and services that IM companies have added atop basic text chat: status messages, avatars, file transfer, voice and video chat, message forwarding to mobile phones. I think there's still value to unifying basic text chat even if higher-level features remain fragmented.
Then, of course, there are business reasons to keep things separate. Yahoo, AOL, and Microsoft all display ads on their services, and AOL is trying to make its service into a foundation on which programmers will create online applications. Opening up IM connections to other services means, for example, that someone using AIM might not see the ads displayed on the AIM software.
I can't help but wonder, though, if a unified IM landscape might spur faster growth and more extensive use of IM services--factors that mean those people using popular chat software could spend even more time gazing at ads.
Other interoperability deals
There are some other interoperability deals besides the Yahoo-Google one announced Thursday. Most notably, users of Microsoft and Yahoo instant-messenger services can link up and chat if they're using recent versions of the software.
And there could be more progress on this front: "Microsoft looks forward to continuing our interoperability reach to customers worldwide," Brian Hall, Microsoft's general manager of Windows Live, said in a statement.
Users of Apple iChat can link with AIM and Google.
Google's situation is complicated, in part because it has multiple IM options. The company offers Google Talk in two incarnations: client software that can be installed on Windows machines and a gadget that runs in a Web browser. Those versions can work with any XMPP-based chat service. (They're not popular, so you probably haven't heard of them.)
Google also has Gmail chat, which runs alongside the company's Web-based e-mail service. It can work with AIM.
So tell me: Am I an anomaly because I use multiple chat networks? And how do you solve your IM needs? Does a single IM client suffice, or do you use two to cover the bases? Send an e-mail to stephen.shankland@cnet.com or share your opinion in the feedback section below.
AOL plans to launch a new program called AIM Money on Tuesday that lets programmers write applications that run in the AOL Instant Messenger buddy list--and lets programmers get a cut of any resulting revenue.
The move is made possible through use of an open interface in AIM 6.8, another new development. Version 6.8 also includes "mini-applications" that run at the bottom of the AIM buddy list window; 150 new CBS radio stations in AOL Radio; and restoration of the ability to save and import buddy lists, a feature that helps move a to a new IM identity.
As the computing industry has discovered the possibilities of applications running on the Internet, companies are rushing to curry favor with programmers hoping those companies' online offerings. Other examples of the idea are Facebook, Google and other members of the OpenSocial consortium, and the Yahoo Open Strategy.
Ultimately, richer applications can mean more users, more activity, more advertising--though the more lucrative elements of the strategy is largely rhetorical than real at this stage for many. AIM, however, has a well-populated list of active users, unlike many start-ups.
AOL announced the interface in March with its Open AIM 2.0 developer program, which lets programmers write software such as the mini-applications that plug into AIM's own chat software, bots that can communicate with humans on the network, Web-based AIM interfaces, and software that show when AIM members are available online through the service.
The revenue for programmers comes through sharing money generated by an advertisement that can appear along with programs that use the new AIM features. AOL serves advertisements using its Platform-A ad network and pays developers through PayPal.
To use the AIM API (application programming interface), developers have to use two of five AIM elements. The ad is one. The other four are bundling the AIM browser toolbar; providing access to AIM Expressions that customize the AIM interface; displaying the AIM Dashboard start page; and displaying buddy info.
Yahoo Messenger 9 offers a more elaborate friend list and can display videos and photos in the chat window.
(Credit: Yahoo)You can't take it with you, at least when it comes to your social graph.
But with a new beta version of Yahoo Messenger 9 software (download it for Windows) released Thursday, users have new options for reconstructing networks of friends and contacts they've built elsewhere.
The new beta of Yahoo Messenger 9 can help user invite contacts on AOL, Google's Gmail and Orkut, Microsoft's Hotmail, MySpace, and other online services to connect through the Yahoo service. Version 9 also includes a special group of all people in your Yahoo address book, helping to connect with contacts users may have stored elsewhere within Yahoo itself.
Also tying more deeply into the rest of Yahoo, the new beta can be used to reflect some other activities within the network--for example, when somebody spotlights a Web site of interest using Yahoo Buzz.
"We'll add more types of updates in the future," said product manager Sarah Bacon in a blog posting about the new beta.
Yahoo Messenger 9 is intended for use on Windows XP, in contrast to the more obviously named Yahoo Messenger for Vista (download it for Windows Vista). The final version of the Yahoo Messenger 9 is due in the third quarter, Yahoo said. The Mac equivalent is scheduled to be released by the end of the year.
Also new in the beta is a better interface for setting status messages--even if you're away from your IM software, Yahoo said. And links to games present in Yahoo Messenger 8 has made its way to version 9, so users can play pool, checkers, and others. However, only those with version 8.1 or later can play games with those using the version 9 beta, Yahoo said.
Yahoo Messenger's icon, a frighteningly happy face, reflects the fact that people have a whole section of their brains just for processing facial information. Yahoo is tapping into that visual cortex a little more directly with the new beta, which uses larger emoticons.
For further information, check Yahoo's blog about the new beta or a Messenger 9 beta demo video.
A recent Gartner study estimates that 189 billion mobile messages have been sent by U.S. mobile-phone subscribers in 2007. It forecasts 301 billion mobile messages sent in 2008.
If correct, those figures would still account for only a small fraction of the 2.3 trillion messages to be sent across major markets worldwide in 2008 (a 19.6 percent increase from the 2007 total of 1.9 trillion messages). Asia is the biggest mobile-messaging market worldwide. China is in the lead, with approximately 560 billion SMS messages sent in 2007, followed by the Philippines' 430 billion and Japan's 190 billion.
The vast majority of the 189 billion mobile messages to be sent in the United States are expected to be SMS text messages, with an average use of about two SMS messages per U.S. subscriber per day. That is similar to the level of SMS activity in the United Kingdom in 2005 and still only at the global average of 2.1 SMS messages per day. The average number in the U.K. today is six SMS messages per day. Singapore is at 12, and the Philippines even at 15.
While the U.S. is still lagging behind Asia and Europe, its adoption of SMS is obviously accelerating. Gartner predicts that this will further propel mobile-payment solutions, as SMS will continue to be the dominant channel for mobile payments.
The analyst house believes that the number of consumers making payments using their mobile phones is set to soar from 32.9 million in 2008 to 103.9 million in 2011.
Despite the continued growth of SMS usage, however, Gartner expects growth rates to slow as direct mobile connections are becoming increasingly cannibalized by mobile-IM communities and social-network portals.
As I wrote before, there is huge potential for an elegant, seamless, cross-platform, and cross-media IM solution that enables the ideal of the "never-ending conversation."
It looks like Apple might again be the first mover here. The company is apparently developing a chat application for the iPhone, as revealed recently through a patent application that describes a "portable electronic device with a touch-screen display, comprising (a) means for displaying a set of messages exchanged between a user of the device and another person in a chronological order." That's basically the description of an UI for an iPhone IM application.
CNBC analyst Jim Cramer thinks that an iPhone IM application is going to be to instant messaging what the iPod was to the Walkman. And Ars Technica is not alone when it suspects that most of the iPhone users will probably value "a way to use instant messaging without using up their SMS message quota."
While the iPhone currently relies on SMS, Apple could add AIM, Jabber, or Twitter to the interface and thus become the de facto universal conversation enabler. However, building a native IM application (and adding third-party chat applications) could create conflicts with iPhone operators that might be concerned about losing potential SMS revenue, if users sidestep SMS by using IM programs.
We will soon find out. The momentum is building up toward a possible unveiling of the next-generation iPhone at Apple's Worldwide Developer Conference on June 9.
Update 4:30 p.m. PT May 1: I corrected the download link and a reference to the Messenger 9 beta for Windows XP, a separate product from the Messenger for Vista beta.
Yahoo has released its Windows Vista beta of its instant-messaging software, adding support for voice chat and cell phone text messages that were missing from the preview version that's been out since December.
Yahoo's updated messenger program for Vista adds voice dialing as well as eye candy known as "Voice Visualizations."
(Credit: Yahoo)The Yahoo Messenger for Vista beta software supports computer-to-computer calls as well as calls to and from phones, Yahoo said Wednesday. It also can communicate with cell phone text messages sent with SMS (short message service) technology.
The software is available at Yahoo's download site.
The software is one of the few Vista-specific applications around, taking advantage of the graphics display abilities of the Windows Presentation Foundation underpinnings of Vista. My comrade Ina Fried was favorably impressed by the interface.
Other features in the version include vector-based graphics for better independence from variable monitor pixel sizes; a Windows Sidebar gadget version; integration with Yahoo address book; integration with Flickr for photo sharing; the ability to view videos and photos sent as Web page links in the chat window; customizable skins; tabbed conversations to cut down on window clutter. Why, I don't know, but I avoid tabbed IM windows even though I use tabbed browser Windows extensively. Go figure.
At its iPhone SDK event last month, Apple touted an adaption of AOL's instant-messaging client for the iPhone. Now comes news of Apple's own patent application for a chat feature.
The U.S. Patent and Trademark Office published the application, titled "Portable Electronic Device for Instant Messaging," on March 6--the very same day Apple was providing details on its software development kit for the iPhone, including AOL's test version of the first "official" native Web chat for the gadget.
The news of the Patent Office's action was first reported by the AppleInsider site late Monday.
AIM for the iPhone, as shown at Apple's March 6 event.
(Credit: Corinne Schulze/CNET Networks)From the patent application, which Apple filed in August 2007:
The GUI has a set of messages exchanged between a user of the device and another person. The set of messages (is) displayed in a chronological order. In response to detecting a scrolling gesture comprising a substantially vertical movement of a user contact with the touch-screen display, the display of messages (is) scrolled in accordance with a direction of the scrolling gesture.
The iPhone already offers SMS messaging.
As demonstrated last month, the AIM-on-iPhone application--which AOL developed in just two weeks--offers a buddy list and lets users easily toggle among multiple instant-messaging conversations with a finger swipe.
Following a recent trend of politicians embroiled in text message-related sex scandals, Finland's foreign minister is facing calls for his resignation Saturday after a tabloid published a suggestive text message he had sent to an erotic dancer, Reuters is reporting.
Ilkka Kanerva sent about 200 text messages to the 29-year-old dancer and at first said they were related to her performing at his 60th birthday party, Reuters says. But on Friday he admitted the messages weren't appropriate.
A Finnish paper quoted him as saying, "I would not present them in Sunday school, but they are not totally out of line either," according to Reuters.
Kanerva is saying he won't resign. His longstanding partner "has accepted his apology over the matter," according to Reuters.
The story sounds all too familiar, what with Detroit Mayor Kwame Kilpatrick facing charges in a text message scandal that threatens to send him to prison, and salacious text messages playing a role in the fall of former New York Gov. Eliot Spitzer.
Our role is to highlight the technological trend--not to pass judgment--but that's hard given all we know about how easily phone records can become public records, especially in the case of officials.
AOL is getting a lot of credit for "opening" its ubiquitous AIM instant-messaging software "to open source." However, like Microsoft did recently by revealing documentation to its APIs and protocols, all AOL has done here is open access to OSCAR protocols necessary to create open-source implementations.
This is great, but consider just how much more AOL could have done--and for its benefit--such as open-sourcing its instant-messaging server and client software.
Think about it. What revenue does AOL protect by keeping its IM software closed? Sure, there's advertising revenue from the obnoxious ads it sprays around the client, but that is thinking far too small.
The real money is in abundance. Or in "adoption-led markets," to borrow Sun Microsystems' nomenclature.
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