Messaging is big business, and the hegemony has lost control. At least, that's what it looked like, until Facebook bought WhatsApp for $19 billion. The sale cost Facebook roughly $45 per monthly active user, but with over 400M people using the app, it could add considerable heft to the company's push to mobile, which already includes 945M existing users of its namesake apps, and over 150M regular Instagram users.
Over the past five years, Research In Motion (now Blackberry) watched its stock price plunge by 90% and sales of its smartphones drop to less than 0.5% of the market. Blackberry users once made up over 40% of the entire mobile subscriber base. Now, according to comScore, they comprise 3.4%.
The enterprise services division is now viewed as by far RIM's most valuable operational asset.
The BBM messaging platform is considered by many to be BlackBerry's last hope — a portable product that inspired intense loyalty among its users. Revenue from the company's services division, driven by BBM and viewed as its most valuable asset, has grown from 15% of the total in 2010 to over half today (the pie, of course, is much smaller now).
We know people have stopped buying BlackBerrys. But where did all those users go? Blackberry is still counting BBM users as "subscribers," but that number dropped from a peak of 80M to around 50M by late last year (Blackberry announced it netted 20M new subscribers during the week after the launch of BBM for iOS and Android). From recent market share data, it seems impossible that they went anywhere other than iOS or Android—Windows Phone has even fewer users than Blackberry at the moment.
Mixpanel's trend reports, based on its cross-platform app analytics, offer one insight: According to this graph of desktop vs. mobile vs. tablet activity, there was a significant increase in mobile usage the week of October 21st, 2013. This spike was large enough to bring mobile activity almost to parity with desktop (tablet use remained unchanged).
Drilling down into Android vs. iOS, we see the same spike in Android usage, jumping from around 38% relative to iOS to over 46%. Looking at these numbers, it seems plausible that something happened that day which caused mobile phone usage to soar, in particular Android. And it turns out that there was a major app launch on that day: the iOS and Android BBM apps.
This does not confirm that Blackberry's apps were directly responsible for the spike in Android activity: the current apps don't appear to communicate with Mixpanel's servers, Mixpanel did not respond to a request for comment, and a representative from Blackberry said the company does not discuss relationships with third-party vendors/ But there were no other app launches that day which might explain the blip in the data, and by all accounts its launch day was a big one.
The launch activity above isn't an isolated data point. Survey data shows Android replacing Blackberry as an iPhone alternative as early as 2010, and comScore install base data shows Blackberry's market share declining almost in lockstep with Android growth.
This should come as no surprise given that the phones occupy the same price points, AT&T and Verizon have been pushing Android hard, and that the iPhone has only available on multiple U.S. carriers since 2012.
Taken in context, the most interesting thing about the BBM app data may not be the volume of activity, but rather that this activity did not sustain itself past the launch date. BBM may have gained 20M new users, but right now, there's no way of knowing how many of them are still sending and receiving messages.
What does this mean for Blackberry? Depending on the timeframe you're looking at, either "not much", or "a whole lot". If one assumes, as has been widely reported, that those lost to competing messaging platforms are mostly teenagers, the enterprise services revenue will probably stay level for the short term. But this doesn't look good for the long-term viability of Blackberry's business model — or, crucially, for the prospect of a blockbuster BBM spinoff, even after WhatsApp's astounding cash-in.