Sorry!! The article you are trying to read is not available now.

Apple, Google Will Soon Cost Carriers Billions

Print comment Post Comments
I'd like to make a plea to every smartphone user out there: Stop texting!

Not because social mores define it as rude. Not because it lends itself to "h8ful" phonetic abbreviations. But because there are a multitude of free alternatives to sending a text. And it's unconscionable that companies like Verizon and AT&T charge $0.20 per text -- or $20 per month for unlimited texting -- for a service that costs them next to nothing.

But it would seem y'all are way ahead of me.

According to the Wall Street Journal, US carriers are noticing a slowdown on texting usage. The wireless industry trade group CTIA reported that cell phone users sent over 1 trillion texts nationwide in the second half of last year. Albeit an increase of 8.7% from the six months prior, it was the slimmest gain since texting became a common practice.

But it's not like people are talking on the phone more. There are just too many free texting alternatives at our disposal, with even more on the way. And it's a huge threat to the $25 billion in revenue carriers currently rake in from texting plans.

This week, Apple unveiled iMessage -- a free messaging service akin to BlackBerry Messenger -- for the upcoming iOS 5. Once launched, users with iPhones, iPads, and iPad Touches will be able to quickly chat and message one another for free, all without relying on a costly texting plan.

Google is also rumored to be debuting a free messaging service for Android devices. While that will also take a chunk out of texting revenue, it does follow the release of Google Talk -- a free AIM-like service for Gmail contacts. And Google Voice, which circumvents plenty of carrier services like Visual Voicemail and Call Forwarding, already offers free texting.

But messaging apps aside, Verizon, Sprint, AT&T, and T-Mobile can't stem the integration of email into everyone's smartphone. Unless those Bill Gates rumors from 1996 are true, email will forever remain free, and smartphones make emailing as easy as text messaging. Plus, you're not limited to 160 characters or a single device to access it.

Cell providers are scrambling to prevent themselves from becoming superfluous middlemen. And while doing so, they're inventing new fees and data caps to keep their exorbitant profits unbelievably high. But hopefully with the decline of texting -- and maybe even some products from the Microsoft-Skype merger -- cell providers will start to realize that the users should be in control.

And perhaps then, calling plans will be the unnecessary expense.

(See also: Has Microsoft Declared War on Carriers? and Apple's WWDC 2011: iOS 5)

For an investment angle on these and many more tech stocks, take a FREE trial to the TechStrat Report by Sean Udall.
POSITION:  No positions in stocks mentioned.