Mobile IM vs. SMS: Who Wins?

[qi:006] Yesterday, the guys from eBuddy sent me a press release (pdf link) that made me wonder: With the rise of flat-rate data plans for feature-packed mobiles and the high-speed 3G network becoming commonplace, will mobile IM start to eat into the lucrative SMS business?

The data from eBuddy would suggest as much. The company claims that 5 million copies of their mobile IM client were downloaded in the first year the company made the software available. The company is processing a billion messages every month from two million unique monthly users. I am still not clear how it translates into big business, given mobile advertising is still in the early development phase.

eBuddy is quite popular in Europe, where 3G has become pervasive. This explains to some extent the heavy messaging reported by eBuddy. It is also an area where SMS charges are quite high, so it’s cheaper to use mobile IM than sending text messages. Mobile IM is a pretty hot market, with a bunch of players, such as OZ, trying to grab the brass ring. Nimbuzz is another recent entrant. Research analysts at Informa estimate the global market for mobile IM will hit $11 billion by 2011.