The Magnetic Appeal Of Messaging Apps

By Michelle Quinn
San Jose Mercury News.

2016: The year we start living our digital lives from inside souped-up messaging apps on our smartphones?

It’s starting to look that way.

Many U.S. consumers have heard about how the Chinese use the wildly popular WeChat for everything: ordering food, shopping, booking vacations, checking credit card bills and, yes, even messaging.

Likewise, in Japan, the Line app is so popular, it introduced its own payment service as well as an Uber-like service for its users to use from within the app.

Tech firms in the U.S. are trying to quickly ramp up messaging features and services to match Asian rivals.

This shift is happening as consumers are using their smartphones more and more and looking to communicate with smaller circles, something that messaging apps are perfect for.

The job of tech firms is to give customers more reasons to stick around, so they’re piling on services within messaging apps, sort of like creating a one-stop grocery store containing everything instead of a separate butcher shop, flower stand, produce market and paper goods store.

If this vision comes true, this kind of super app could become our new mobile operating system. We won’t need the current glut of separate apps on our phone.

As Business Insider put it recently, “The idea is pretty straightforward: People like to chat and don’t like leaving chat to open another app. Put the app in the chat, and you get the best of all possible worlds.”

And if this vision comes true, there will be likely winners and losers. Most at risk is Google, which has commanded the desktop through its browser and search services. Apple, which has dominated mobile with its App Store, might find itself out in the cold if messaging services offer their own stores connecting customers and developers. And carriers also stand to lose if customers text less.

Others could benefit from the trend.

Facebook’s early head start — in addition to Messenger, it owns WhatsApp — could mean that even people who aren’t on Facebook will feel a need to have Facebook Messenger.

But there are other choices and a player who finds the right formula for consumers could soar.

“The field of mobile messaging apps is crowded and fragmented, and moving into the New Year, the belief is multiusage will continue,” said Oscar Orozco, a forecaster with eMarketing, a market research firm.

One of the most intriguing messaging app trends is directing a “bot,” short for robot, to go find what we need, whether it’s showing us three blue ties to buy Dad at a certain price point or a place nearby to eat. Users click to decide the next action offered by the bot — show more ties or make a reservation.

“We have gone through these shifts before, from the desktop to the browser and then to apps. Now it’s going to be bots,” said Beerud Sheth, chief executive of Webaroo, a Fremont firm that makes the Teamchat enterprise messaging app. He was also the founder of Elance.

“Apps and websites force humans to behave like computers,” he added, noting that these bots are learning to think like us and make selections based on what they anticipate we want. “Now we force apps to behave like humans. On the small screen, you don’t want a catalog of 100 options when you shop. You may see two or three.”

The U.S. has lagged behind Asian countries when it comes to the adoption of messaging, although it is picking up. A recent comScore report said 40 percent of mobile subscribers use a messaging app once a month.

Investors and entrepreneurs are betting that chat is the new frontier.

“It’s one of the more exciting areas in tech now,” said Michael Vakulenko, strategy director at VisionMobile, a market analysis and strategy firm.

Facebook recently announced that users could order up an Uber from Facebook Messenger, its stand-alone messaging app.

That’s in addition to features the company offers such as being able to send friends money or use an in-app mapping service.

The company has also unveiled M, a virtual assistant that helps users from within the app. Think of it as similar to asking Apple’s Siri not just questions but to find products or buy tickets to a movie.

“The bot could help them with all stages of deciding what to buy to actually making the purchase and handling payments,” said Vakulenko. “You will communicate with services with messages.”

So far, Facebook hasn’t pushed these new services on to users. But that will likely change as the social network strives to get users to spend more time in its messaging world.

Google, which has lagged behind Facebook in this realm, reportedly is working on its own virtual assistant, somewhat like Facebook’s M, known as “chat bots,” in which a user texts questions.

On the business side, Slack, the collaboration app, has recently created its own version of Apple’s App Store for developers to show off their wares so that you don’t have to leave Slack to do something else. It also announced an $80 million fund to encourage developers to create tools and services.

This is the exciting brave new world of apps within apps. Messaging apps like China’s WeChat are the “operating system for our lives,” Connie Chan, a partner at venture capital firm Andreessen Horowitz, said in a recent report.

So what could realistically happen this coming year?

Most of the initiatives at startups are focused on shopping or running errands, said Vakulenko. No killer app has emerged yet that would encourage people to give up juggling stand-alone apps on their phone and just live inside one convenient and user-friendly messaging system, but developers are headed that way.

“People are experimenting,” he said.

It remains to be seen if companies will offer a compelling reason for users to give up their app-cluttered smartphones.
But we might if a virtual assistant helps us find our way.


Number of unique monthly users for the app on a mobile device:
Facebook Messenger — 104 million
Snapchat — 35 million
Skype — 19 million
Kik Messenger — 14 million
WhatsApp — 11 million
Source: comScore, October 2015

Your messaging app may not offer these features yet, but it likely will in 2016:
Peer-to-peer payment
Phone calls and video messaging
Order an Uber
Ask a virtual assistant for help with a task

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