2022 just seemed to fly by. It’s 2023 and it’s that time again. Time for us to look into the crystal ball to see what might be in store for this always transformative industry. From the Ukraine war to more pandemic troubles, to extreme weather to the 2022 US election – the mobile industry played significant roles in these and in every aspect of our lives.
Interestingly enough, this is my 16th year in publishing these predictions and of course, 16 years ago, on January 9th, 2007, the iPhone was first introduced by Steve Jobs with the first sales on June 29th, 2007. Not-so-coincidentally, my first blog post: Could the Apple iPhone Influence Mobile Messaging was published on September 11, 2007 with an assessment of what this new mobile phone from Apple might do to messaging. As we know, it affected messaging a lot, in the end – especially iMessage, in that it resulted in cannibalization of around 20-25% of the global volume after it went live in 2011.
As we do every year, before getting out our crystal balls, it’s time to assess last year’s predictions. As I’ve noted before, the assessment is somewhat objective, with some subjectivity as these are my predictions. It’s also a good way to review the major industry topics from the previous year.
If you want, you can Skip to the 2023 Predictions.
1. Let’s start with mobile operator-based mobile messaging – of course, our specialty. SMS has and will continue to lead as the predominant business texting channel. Global Person-to-Person (or P2P) will continue its robust showing, but with a slight decline (-0.5% to -3% decline). For business texting, MMS will continue to play a major role for brands and enterprises – we might see as much as a 10-20% increase over 2021. Finally, RCS as a consumer engagement channel will grow to between 1 billion and 1.2 billion unique mobile users (for A2P RCS) – probably not rising as much as it did in 2021. Despite the Wall Street Journal’s article on “Why Apple’s iMessage Is Winning: Teens Dread the Green Text Bubble,” (and the follow-up tweets and articles), we still won’t see Apple support RCS within iMessage in 2022.
[2022 Assessment] First off, to get this common prediction out of the way, Apple did not support RCS within iMessage and pretty much shot that idea down, going forward. For Global P2P, we see a decline in the general messaging volumes compared to 2021 (which saw a spike mid-year). Overall, international country-to-country SMS in 2022 was still roughly consistent with 2019 to early 2021. In North America, national SMS looks to have declined around 3.52%. For Business MMS, while I don’t have hard numbers this year, there is subtle evidence that it is increasingly being used, as part of multi-channel campaigns that may include messaging apps such as WhatsApp, RCS, and SMS.
RCS users grew 74.5% in 2022 to over 1.2 billion RCS business messaging users per Mobilesquared Business Messaging Tracker (this is less than the 81.5% growth in 2021). Despite many naysayers, RCS continues to deliver results for messaging campaigns around the world – especially those where Android devices are prominent. Not quite spot on, but good enough for 90% correct.
2. Shifting over to the Social/Chat Apps/OTT messaging channels for B2C use-cases, WhatsApp will continue to lead, followed by Facebook Messenger with Apple Business Chat potentially overtaking Messenger in 2022. WhatsApp overall won’t grow much (< 5%). Telegram and Viber also won’t grow as much as previous years. Some of these highly encrypted channels, along with the Meta brands will come under increasingly critical scrutiny due to their roles in providing (perhaps unwittingly) contributions to extremism spread in the last couple of years.
[2022 Assessment] Part of this prediction was easy! Of course, WhatsApp continued to lead the pack with an estimated 23.9% 12-month growth through December 2022 (much higher than my forecast, though!), according to Mobilesquared’s Business Messenger Tracker. While Meta has not released WhatsApp usage data since 2020, Mobilesquared estimates that as of December 2022, WhatsApp users rose to 2.725 billion. Apple Business Chat did not overtake Facebook Messenger users (1.560 billion as of December 2022). After significant growth in 2021, Telegram showed a modest user growth of 6.7% with Viber continuing steady growth of 10.2% – roughly the same as in 2021. In the UK, as reported in a Deloitte blog posting: “the Financial Conduct Authority (FCA) has noted that with increased remote working since the start of the pandemic, concerns have been raised about the improper use of encrypted or unmonitored messaging applications such as WhatsApp, Signal, and Telegram.” Additionally, there have been continuing concerns about extremism organizations leveraging encrypted apps for organizing from many governments, including the US. I underestimated growth in some messaging apps, so 60% correct.
3. Mobile Consumer Engagement Trends. Consumers will continue to be reached through a variety of methods; however, expect more businesses to turn to multiple messaging channels in addition to web and email. Moreover, with the inclusion of chatbots with messaging channels, many brands and enterprises will rely more on messaging and less on specific apps to interact with consumers. Depending on region, WhatsApp and SMS will remain the top 2 engagement channels.
[2022 Assessments] 2022 continued to be about CPaaS providers – in fact, this is a very popular “path to brand/consumer engagement” as Mobilesquared outlines in their new research. All research points to more multi-channel engagement, even though 2022 was a return to back to normal, business-wise, since the early years of the pandemic. Automated Interactions (or consumer interaction through AI-enabled chatbots) continued rising in 2022, but not all market segments showed the same level of growth as was seen in 2022. Overall, automated interaction for the Retail, E-commerce, and Consumer Goods segments rose 66%YoY for 2022 vs. 227%YoY for 2021; however, Healthcare automated interactions grew 445% YoY – good stats from Ada’s blog’s post: The Data Is In: What Automated Interactions Tell Us about Customer Expectations in 2023. Of course, the easy part of this prediction is that SMS and WhatsApp do, in fact remain the top 2 mobile engagement channels. Of course, if we include email, then they are in there are well. 100% correct.
4. In the authentication/verification space, I don’t expect much change. SMS based 2FA will continue to lead, even though many security experts warn of its insecurity. Second most used will be 2FA over email, followed by TOTP-based (app-based) security codes. We’ll also see more FIDO-based security becoming more prominent as well as data-based solutions that leverage mobile operator data to validate. Mobile devices will, by far, remain the predominant “something you have” component to multi-factor authentication.
[2022 Assessment] As expected there was little change in authentication. SMS and email continue to lead as the most used validation methods for 2-factor authentication. In their mid-2022 Transparency report on Account Security, Twitter noted that 74.4% was SMS, followed by 28.9% using an Authentication (TOTP) app such as Google Authenticator. Not surprisingly, SMS was used much more than email. There’s not much industry data to indicate that there was a significant increase in FIDO-based security or mobile operator data as validation options; rather, Duo cites evidence that 92% of their global accounts used Push-base authentication. There was some data that indicated that fraudulent 2FA SMS “pumping” has been occurring. Both Twilio and Twitter have discussed this. It’s not a significant problem, but one that needs to be watched and managed. Most legitimate 2FA providers have controls and capabilities to prevent that sort of fraud, but it is certainly worth monitoring in the future. 80% correct as I was off on FIDO and mobile operator data.
5. For Robocall/Robotext Mitigation efforts, expect to see some concrete regulation proposals from the US FCC. While plans for robotext mitigation were outlined in 2021, no details were given. We’ll see these details in 2022. Mobile operators will work to further increase their spam text mitigation efforts along with the messaging/CPaaS providers. While STIR/SHAKEN was put into place in 2021, there are still issues with robocalls, especially in the United States. Expect more proposals and stronger penalties for robocallers when they are caught.
[2022 Assessment] We did indeed see the FCC’s Notice for Proposed Rulemaking (NPRM) for Robotexts in the 2nd half of 2022, which did propose the application of STIR/SHAKEN implementations to SMS. Fortunately, the industry responded with a clear message that this STIR/SHAKEN mitigation does not apply to texting and that the FCC should not mandate specific measures – instead, the industry should continue on its existing direction in robotext mitigation. Regarding robocalls, a TransNexus blog post notes that robocalls were up 1.2% over 2021, after 2021 was up 10.6% over 2020. A different TransNexus blog post notes that “despite monthly increases in STIR/SHAKEN participation across 2022, we did not see an increase in the percentage of signed calls received at the termination for most of the year.” They also note that signed-robocalls continue, fueled by robocall-friendly providers that sign these calls with no enforcement or consequences. 100% correct.
6. In 2021, Apple launched the iPhone 13 series along with an updated Apple Watch and iPad. Additionally, iOS 15 was launched with a strong list of new features. In 2022, Apple once again will add the iPhone 14 and iOS 16. 5G band coverage will stay the same or only add one or two bands. Don’t be surprised to see some support for low earth orbit (LEO) satellite support in newer Apple devices. I’ll go out on a limb here and For Android, we can certainly expect Android 13 to go live, along with new connectivity capabilities, supporting other Google products and even Windows PCs. Android and iOS will remain the dominant mobile operating systems for smartphones.
[2022 Assessment]. iPhone 14 was announced and launched in 2022, along with iOS 16. 5G coverage in the iPhone 14 models actually added 5G bands (over the iPhone 13 series): n14, n26, n53 and n70 for even greater coverage along with satellite coverage (provided by GlobalStar with a constellation of 48 LEO satellites), to support a new emergency SOS capability.
Android 13’s stable, public release was August 15th, 2022. Android 13 will let users stream any app on their phone on Windows 11 among many other feature upgrades. Of course Android and iOS continue to be the dominant mobile operating systems by far. 100% Correct.
7. As we start 2022, the US FCC is still evenly split politically between Democrats and Republican commissioners with one vacancy. Gigi Sohn has been nominated, but not yet confirmed as of this writing. Once the 5th commissioner is confirmed, expect the FCC to quickly work to restore Network Neutrality protections to help overcome the variety of state-based network neutrality laws. While the rules probably won’t go into effect in 2022, the commission should be able to vote in 2022. In addition to this, expect to see additional rulemaking around privacy, robocall/robotext mitigation, and breach notification.
[2022 Assessment] Gigi Sohn was not confirmed as an FCC Commissioner in 2022 and her nomination is still pending; consequently, some of the more politically fraught rulemaking was not undertaken. Still, the FCC did release an NPRM to combat robotexts in the 2nd half of 2022. Only 20% correct.
8. 2022 is an election year in the United States. Consequently, campaigns will begin to heat up in the spring and really get going in the summer. Mobile will play a central role in campaigns – especially mobile messaging. As SMS is the predominant channel in the United States, expect to see billions of sanctioned, campaign messages, with 2500 – 3000 registered campaigns using mobile messaging (local, state, and national). Unfortunately, we’ll also see more attempts at circumventing accepted best practices for political texting, resulting in spam texts that the industry will need to deal with.
[2022 Assessment] Based on data from Campaign Verify, we estimate that over 6700 political campaigns were registered in 2022 for 10DLC messaging alone. There were additional messaging campaigns leveraging toll-free numbers, but the majority were registered using 10-digit long codes as senders with a breakout of 76% for State/Local campaigns and 24% for Federal campaigns. Our own spam analysis suggest that there were fewer attempts to use non-sanctioned messaging routes vs. previous election cycles; however, 7726 (SPAM) short code reports show that many registered and sanctioned campaigns still resulted in subscribers reporting those messages to 7726. This means that it was likely that opt-in or consent to receive these messages may not have been as robust as it should. Robokiller estimated that at the peak of the election season in November and December, over 3 billion political texts were sent each month. 100% Correct.
9. 5G networks will roll out at a rate greater than in 2021 with at least 300 operators in 140 countries with live 5G services. Expect over 810 networks providing LTE mobile services and at least 350 MNOs providing services with LTE-Advanced in 160 countries by the end of 2022. For NB-IoT there will be 150 networks which have launched services and 60 who have launched LTE-M networks. We will also see a continual wind-down of 2G and 3G networks across the globe, causing some issues with legacy devices. The issues between the aviation industry and US wireless carriers regarding their deployment of C-Band spectrum which has resulted in delays of C-Band rollout near many major airports will not be fully resolved by the end of 2022.
[2022 Assessment] In 2022, operators did roll out new 5G commercial networks, but there was not necessarily an increase in the rate. Per GSA, at the end of 2022, there were 243 commercial networks in 96 countries, somewhat below our forecast. For LTE networks, 817 operators have commercially launched LTE networks and 351 LTE-Advanced networks. Turning to IoT, GSA reports 124 NB-IoT commercial networks and 57 commercial LTE-M networks, also a bit below our forecast.
In 2022, the major US carriers began turning down 3G networks. The biggest impact was on home alarm systems (including our own, which we upgraded, before AT&T shut down 3G in February 2022). Europe also saw 3G networks wind down 3G in 2022, across a number of mobile operators, with more scheduled through at least 2025. In the Asia Pacific region, KDDI in Japan was the most prominent mobile operator to shut down 3G, with many more either already shut down or scheduled in the coming years. Finally, the ongoing issues regarding the US C-band rollout and the FAA/aircraft altimeters won’t be fully resolved until (currently) July 2023. 65% Correct due to missing 5G and IoT forecasts.
10. Mobile devices will increasingly be used to support NFTs as bidding and access devices. Expect further usage of secure mobile apps to track, manage, buy and sell NFTs with one or two apps becoming break-out favorites. Within the virtual world of the metaverse, we can also expect NFTs to play a role in providing elements of new metaverse virtual worlds. Finally, mobile devices will gain new connectivity and functions to be better able to visualize these new virtual worlds.
[2022 Assessment] As reported in the Business 2 Community, 2022 saw the NFTs reach $40 billion valuation with more than $10 billion worth of NFTs sold weekly. NFT mobile apps began to play a major role in the creating, buying, and investing with a number making the top 10 lists on Business 2 and other publications. The app OpenSea seemed to be on everyone’s list as the most widely used and classified as the top favorite. While NFTs and the marketplace gained ground in 2021, they seemed to have plateaued in 2022. Interestingly, mobile devices were tools to track, buy, and sell NFTs, but not necessarily a primary component of the metaverse virtual worlds… yet. NFTs were not quite as dramatic in the mobile industry as had forecast, yet we were in the neighborhood, so call this one 70% correct.
The final score for my 2022 predictions was 78.5% correct. Not as good my 81% for the 2021 predictions. As noted, 2022 wasn’t a particular threshold year for the mobile industry. Everything continues to evolve incrementally, and I think it will continue to do so.
Which brings us to… what will happen in 2023?
2023 Mobile Industry Predictions
First off, anything can happen. As the past few years have shown us, we really live in unpredictable times. Yet, this industry remains resilient and continues to be an absolute necessity for most of us. But it does evolve – sometimes incrementally, sometimes quite rapidly. After a few years, we look back and really see how far we’ve progressed. Most times, we don’t realize that some small, inconsequential invention or industry change ultimately becomes something quite spectacular. For 2023, I think we’ll see a mix of small, incremental changes and one or two bigger revelations. This is now a very mature industry, but one that does keep up with the times and in many cases, remains on the cutting edge of how we consume data and communicate.
Here are my predictions for the mobile industry for 2023 in no particular order. Remember, many of these have multiple parts (just so I make a bit harder on myself!)
- Mobile devices – Expect another round of new Apple iPhones – specifically, the iPhone 15. Like the iPhone 14, which was introduced in 2022, the iPhone 15 will include more capabilities around satellite communications options. This year, I think Apple will finally introduce support for and products for Virtual Reality (VR). Not yet a gamechanger as to how we interact with mobile devices, but a start. The next iteration of iOS will likely be more incremental changes vs. a major overhaul. For Android, of course, there are many dozens of supported devices. Like iOS, no major overall for the Android operating system, which will remain highly fragmented across multiple versions in the field. Also look for more VR support in association with these devices as well.
- Mobile messaging – carrier solutions – In the world of carrier-based messaging (specifically SMS, MMS, and RCS), SMS will continue to be the most prominent channel for interaction; however, P2P SMS will decline slightly by around 5% overall (leveraging the heavy usage in the United States as a key statistical driver). But A2P SMS usage will continue to grow. RCS is definitely not dead nor a zombie channel. It will slow its growth rate, but it will surpass 1.5 billion daily users – primarily for business interactions with consumers, reaching almost 40% of smartphones by the end of 2023. MMS will continue to be an important rich messaging channel – especially where RCS can’t make a strong penetration. An easy prediction: iOS will not support RCS in any form (again).
- Messaging Apps had a big year in 2022 and will do so again in 2023. WhatsApp usage will continue to increase, reaching at least 2.95 billion users, but not over 3 billion users (and reaching over 65% of smartphones). This will be followed by Facebook Messenger reaching 1.75 billion users. Apple Business Chat will remain in third place but will only reach 1.1 billion users (it’s only at 1.07 at the end of December, so not much growth there). With strong usage and as kind of an alternative social media, Telegram will continue to grow to reach over 1 billion users. Overall, these channels will continue to slowly grow; however, their growth rate will slow down in 2023.
- Let’s take a look at US A2P Messaging – this market is undergoing a significant change over the last 2 years. Until 2020/2021, when long codes (what we refer to as 10-Digit Long Codes or 10DLC) as sender IDs for businesses were officially sanctioned by all tier-1 US carriers, business traffic was relegated to short codes only. Since that 10DLC usage among small and medium-sized businesses has soared. 2023 will be no different. After a massive 265% 10DLC activation growth from the end of 2021 to end of 2022 (and that didn’t even include Sole Proprietor 10DLCs), expect to see at another 100+% growth in 10DLC activations (again, excluding Sole Proprietors) in 2023. We should note that we’ve seen no evidence that 10DLC negatively affects overall short code usage and we’ll see at least a 7% year over year growth in active short codes (after a very robust 16% YoY growth in 2022). This type of A2P messaging growth (SMS and MMS) is really helping businesses grow and spend their outreach dollars wisely in a time of financial uncertainty.
- 5G networks will continue to be launched commercially around the world reaching over 275, maybe 300 commercially available. But LTE and LTE-Advanced networks will also play important roles in providing high quality mobile data to subscribers around with 850 commercial LTE networks and up to 400 LTE-Advanced commercial networks available by the end of 2023. IoT-specific networks will continue to flourish as the Internet of Things continues to evolve and grow. Expect 140 NB-IoT and 65 LTE-M commercial networks available by the end of year. Finally, we might see at least 10 mobile network operators beginning to invest in 6th Generation network technologies (or 6G). That said, 5G network rollout will continue throughout this decade.
- The FCC nomination of Gigi Sohn remains stalled at this point with considerable and ugly attacks on her as conservative forces align to disrupt her confirmation. This year, I predict her nomination will be confirmed in the US Senate – likely on a party-line vote. In 2022, the US FCC issued a Notice for Proposed Rulemaking (NPRM) to combat “robotexts” (or spam and phishing texts). The messaging stakeholders in the US industry responded with an almost unanimous voice that the proposed methods of combating spam texts were not fit for messaging and that the industry is already providing considerable solutions against spam. I believe that the FCC is a reasonable body and will listen to these comments and not issue any “robotext” regulations in 2023 but will continue to monitor the situation and take aggressive action against entities that have proven to initiate major phishing attacks.
- 2022 was a big election year in the United States with over 15 billion political texts sent, with over 6700 Campaign Verify registrations. While not a major election year, candidates and political parties and political action committees will start ramping up for the Presidential Election in 2024. Expect as many as 4000 new Campaign Verify registrations in 2023 (as previous registrations have expired from the last election cycle). Additionally, while the US Supreme Court loosened consent requirements for political texts, that doesn’t mean that the carriers would still require consent. Expect some carrier changes and updates to their messaging policies to accommodate what will be a huge surge of political texting in 2024.
- With the mainstreaming of 10DLC messaging in the United States, continued strong growth in short code messaging, as well as robust omni-channel outreach provided by the CPaaS community of providers, consumer engagement through mobile channels will continue to be one of the most effective means for businesses to communicate with consumers. SMS and WhatsApp will lead the pack, but expect more conversational outreach. UCaaS (or Unified Communications as a Service – Internet based phone and messaging) providers will excel in 2023, with many becoming mainstream in large and small businesses everywhere. This will certainly drive some of the conversational commerce and messaging. One-way A2P will continue to lead across all channels, but 2-way, messaging based, conversational interactions will grow with growth in rich messaging across all channels.
- It’s been a while since we took a look at the mobile payments market. For one, it is now dominated by Google Pay and Apple Pay, followed by PayPal in terms of usage That statistic won’t change for 2023. Instead, let’s focus on availability. Mobile payments – typically contactless – have become mostly mainstream, especially since the pandemic really boosted mobile payment usage. Google Pay is available in 53 countries for contactless payments (more for online purchasing) as of this writing. By the end of 2023, that should increase to 60-65 countries. As of this writing Apple Pay is available in 75 countries (Apple doesn’t differentiate between contactless or online acceptance). That should increase to 80 countries by the end of 2023. Of course, PayPal beats both of them with over 200 countries. No predicted changes for PayPal in 2023.
- Over the last few months, ChatGPT has dominated the AI headlines as well as mainstream headlines. As ChatGPT put it when I asked how it might play a role in the mobile industry: “As a language model developed by OpenAI, ChatGPT itself is not directly involved in the mobile industry. However, its technology and capabilities have the potential to contribute to the development of new applications and services in the mobile industry.” That said, I think ChatGPT (and Google’s Bard) may actually help enhance engagement through mobile devices. With Google Bard, consider that this could play a role in RCS-based chatbots, through an API to enhance interactions. Generative AI is getting very good; however, it does have limitations and I think the noisy hype will decline by the 2nd half of 2023, but also look for the beginning of some interesting integrations into useful applications through mobile apps and even messaging.
As I finish this piece, we’ve already had a devastating earthquake in Turkey and Syria and multiple balloons / objects are being shot down over the United States and Canada. SMS messaging in/out of Turkey elevated to 3x to 4x of normal and has remained high. People are using WhatsApp and Telegram to help coordinate rescue efforts and more.
Our devices are ubiquitous and will remain one of our primary tools to help save lives. Consequently, this industry must continue to evolve and remain vigilant and trustworthy in order to be available for all of us, whenever we need to communicate and learn vital information. This will take investment and continued innovation now and continuing indefinitely.