Last week, Line, a messaging app popular in Asia, filed for a U.S. IPO. In doing so, they hope to better compete in an overcrowded market.
Messaging apps are one of—if not the—most competitive types of apps. Once downloaded, consumers are typically loyal to one [1], and so, publishers and developers are forced to try to lure users away by competing on a host of different text supplements. Emojis. Stickers. Videos. You name it. Line wants to make headway with its version of stickers, of which 389 million are sent per day, according to the company's SEC filing.
But at the time of our first article, we suggested that Apple’s forthcoming apps for iMessage would help sort out the marketplace long before Line could make any impact. We reasoned Apple would do what Apple does best—improve upon an established idea (in this case, messaging add-ons)— and leverage its preexisting iMessage user base to dominate the messaging market. The thinking was that eventually, with all available features contained on a pre-loaded iMessage, users would cease to have a need for third-party alternatives. It would probably take years, but it would happen.
Now, we’re not so sure.
Rise of the Bots
A recent article in The Economist argued that because the app stores have become so overcrowded, and people find searching for and using new apps to be a pain, something has to give. Enter bots.
Bots are text-based services that let users complete a particular task that otherwise nowadays might be completed online or in-app: booking plane tickets, ordering food, etc. Think of Domino’s text a pizza emoji to order food, for example. Though it’s not automated (far from it), the principal remains the same: enter a brief line of text, something gets done.
And while we don’t agree that there is no room to earn revenue in the app stores as a whole, there are certain categories—like messaging apps—that are all but impossible to compete in as a newcomer. Bots make sense as the next competitive iteration of messaging apps, or at least an add-on of, especially when you consider it’s very apparent that users have a high propensity for text-based communication.
The Economist thinks as much too, writing, “The popularity of messaging apps suggests people will happily talk to bots.”
We’re not suggesting that human-to-human communication will suddenly be automated. That’s some “Brave New World” stuff. What we are saying is that incorporating some text-based bot feature into a messaging app could be the competitive differentiator that helps elevate one over another. And if that's the case, it doesn't matter what type of stickers Line, Apple, or any other messaging app offers.
[1] After all, how many different messaging apps could you need?