Apple's Vision for RCS is Now Clearer: What to Expect

June 2024

Telecoms & Connectivity

Sam Barker

VP of Telecoms Market Research

RCS has been hindered by a lack of support over iOS devices. However, in November 2023, Apple finally announced its plans to roll out RCS support in 2024. At the company’s WWDC event in June 2024, it provided more information on the integration of RCS into iMessage, including the support for the GSMA’s UP (Universal Profile). Read receipts, audio notes and high-quality media support will be implemented into iMessage.

The Impact of Apple’s RCS Support on the Mobile Messaging Market

RCS business messaging was first formed in 2007, and is a richer alternative to SMS. RCS allows users to send and receive rich media such as high-resolution images, videos and GIFs. Messages from brands are also verified. But what does this mean for the mobile messaging industry?

SMS has been the cornerstone of the business messaging market over the previous two decades. However, it continues to face pressures from alternative technologies and services, including RCS. As a result, our messaging research has shown that demand for SMS business messaging traffic is declining in many markets owing to high termination prices and high levels of fraud over SMS networks.

This leads to the potential for RCS messaging technology to cannibalise the established SMS traffic that has provided operators with over $50 billion in revenue globally in 2023. However, with this diminishing level of trust in SMS, and the now growing reach of RCS, it is imperative that operators expand their portfolio of messaging technologies to cover transactional and promotional use cases.

This expansion of reach can be seen in the below figure. Apple’s support of RCS will lead to the number of RCS-capable subscribers overtaking the number of non-capable subscribers for the first time. This provides a valuable proposition for enterprises looking to capitalise on both the reach and the rich media elements of the technology, and we expect promotional use cases, such as advertising and upselling, to be amongst the first use cases across various industries.

Global Proportion of Mobile Subscribers That Are RCS Capable (%), 2019-2025

Source: Juniper Research

Key Strategies for Attracting Clients to RCS

Whilst much of the media attention from WWDC 2024 has been focused on Apple Intelligence and the benefits to iOS and MacOS users, the key beneficiary of Apple’s RCS support will be B2C enterprises who leverage mobile messaging, and the operators who benefit from the increased revenue. But how do operators and messaging service providers maximise this revenue?

Juniper Research has identified several key technologies, their benefits, and strategies on how to increase their effectiveness. They are as follows:

• Brand Verification & Authentication: The implementation of conversational AI and eCommerce capabilities into the native messaging app will be instrumental in providing a highly valuable proposition for the retail sector. By 2028, our latest research predicted that over 35% of RCS business messaging traffic will be attributable to this sector, accounting for approximately 300 billion messages.
• Chatbot Integration & Conversational AI: With the rise of LLMs (Large Language Models), omnichannel communications approaches are more valuable to enterprises than ever. Indeed, Apple has partnered with OpenAI for its virtual voice assistants, and we expect vendors to expand on similar partnerships for conversational AI, an aspect that suits the rich media messaging capabilities of RCS messaging.
• Additional Security of RCS Messaging: Additionally, with the ever-expanding use cases of messaging over RCS messaging, security of content in transmission will remain of the utmost priority. Unlike SMS, RCS has end-to-end encryption, which will be vital in attracting potential users from the banking industry, including the TLS (Transport Layer Security), self-destructing messages and verified senders.

Operators must promote RCS basic messages, which have price parity with SMS, to encourage enterprise adoption of RCS. This will encourage enterprise users to explore the rich media messaging capabilities, and whilst operators benefit from the traffic, its will be CPaaS vendors and mobile messaging platforms that will provide the management tools.

For more insights on how messaging markets are evolving, visit our Mobile Messaging Market Intelligence Centre, where you can find studies including:

• Mobile Messaging: Our leading study into the mobile messaging market provides a comprehensive analysis of the messaging ecosystem. It includes an assessment of the challenges facing the market and in-depth strategic recommendations for key stakeholders, including mobile operators, messaging platform providers and OTT (Over the-Top) messaging application players. In addition, the report assesses 20 leading mobile messaging vendors in the latest iteration of the Juniper Research Competitor Leaderboard.
• RCS Business Messaging: This study is comprised of comprehensive assessment of the growing RCS market and its challenges; identifying key focus markets aligned with strategic recommendations and emerging opportunities for market stakeholders.
• A2P Messaging: Our A2P Messaging research suite provides a detailed and insightful analysis of this established market; highlighting key areas for innovation and future growth. This enables A2P messaging stakeholders to understand key trends within this competitive environment.
• CPaaS: Our latest CPaaS research provides a comprehensive assessment of this growing market, featuring a regional analysis and an evaluation of each of the channels that comprise CPaaS offerings, including email, MMS, chatbots, RCS, social media, SMS and voice services.

As VP of Telecoms Market Research at Juniper Research, Sam produces research on telecommunications technologies and the future of digital content - with recent reports covering CPaaS, 5G Satellite Networks, and Mobile Messaging. He has also been interviewed by leading media outlets, including the BBC and Wall Street Journal, and is a regular contributor to messaging conferences and telecommunications industry events.