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Apple’s iMessage Could Lower Your Wireless Bill

Will the new instant messaging service kill old-fashioned texts?

Thumb war! Tomorrow Apple is expected to introduce a free alternative to text messaging that could spell savings for avid texters. The program, called iMessage, will allow iPhone, iPad, and iPod touch users to exchange messages with each other over WiFi or 3G Internet connections.

Although there are already free instant-messaging apps, this latest foray is more akin to BlackBerry Messenger, the popular Berry-to-Berry service. iMessenger will be embedded in the operating system and available only on Apple devices, which means most users won’t be able to ditch text messaging completely, unless they restrict contact only to people sporting Apple gear.

Still, the program has the potential to take a bite out of the $20 billion wireless customers spend on text messages each year, and could prompt wireless companies to lower their unlimited texting rates to stay competitive – as has happened overseas.

Verizon Wireless and AT&T currently charge $20 a month or $240 a year for unlimited texting. (They declined to comment for this story.) Since nearly 70% of cell phone owners text, according to market research firm ComScore, the messages are the second-biggest source of revenue after voice calls. Although the texts sent through iMessage do count towards user’s data plans, they are too small to make much of an impact.

It may not be a clean win for Apple. Cell phone operators could band together and act as an aggregator for their own ad-supported free/low cost app, says Scott Sutherland, analyst for Wedbush Securities, but don’t expect change overnight. “The transition away from texting may take a long, long time,” he says.


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  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.