Market Analysis: Apple’s Announcement on RCS Support in 2024

November 2023

Telecoms & Connectivity

Molly Gatford

Senior Research Analyst

On the 16^th of November, Apple announced that it would support the universal profile for RCS (Rich Communication Services) messaging. RCS can be defined as an operator-led messaging protocol, which allows for the sending of rich media and improved functionality over SMS. Support for RCS is expected to be available on iPhones following a software update starting in 2024.

This follows new legislation in the EU, the DMA (Digital Markets Act), coming into effect in March 2024, which is designed to harmonise platform regulation across the EU.

However, iMessage is still expected to be available to consumers for communication, and is still a more secure and privacy-friendly messaging channel. RCS will therefore exist separately from iMessage, while SMS and MMS will be used as fallback when RCS is not available. However, it is expected that enterprises will be able to use RBM (RCS Business Messaging) via iOS devices towards the end of 2024.

The RCS standard is supported by Google and is currently available on Android devices. At MEF’s RCS World in 2023, Google announced that there were 1.2 billion monthly active RCS users, and this number is expected to increase substantially following Apple’s announcement.

Timescales: 2024

Region(s): Global

Juniper Research’s View

Apple’s intention to support RCS on its range of iPhones greatly increases the value proposition of RCS to enterprises. This is because the total addressable user base will increase substantially, and enterprises will now be able to communicate with a large proportion of their customers.

SMS prices continue to increase, with AIT (Artificially Inflated Traffic) fraud being a key contributing factor to this. As a result, the demand for SMS is plateauing, with enterprises expected to lose out on revenue to OTT players. Therefore, it is likely that RCS business messaging will emerge as a key strategy for operators to maintain business messaging revenue growth.

RCS is available on the majority of tier 1 operators globally and support for the messaging channel is well established in developed countries. The immediate boost to the addressable RCS userbase following Apple’s support will increase the potential monetisation opportunities for operators. This will also result in more operators supporting RCS as a technology.

The Impact on Mobile Messaging Markets

The increase in the price of SMS has resulted in enterprises paying higher prices for mission-critical messages such as MFA (Mult-factor Authentication) and OTPs (One‑time Passwords). The rise in AIT fraud is culminating in revenue losses for operators, as enterprises seek other alternative authentication technologies that provide greater value. The availability of other channels for authentication, such as OTT business messaging and flash calling, will continue to threaten overall business messaging revenue. However, as RCS becomes a more universal messaging channel, this will be a key method to combat operator losses.

RCS basic messages will play an important role in increasing the adoption of RCS by enterprises initially, as these messages have price parity with SMS with the increased functionality of RCS messages. However, to grow RCS business messaging against the threat of OTT messaging, rich media capabilities, such as images and carousels, must be promoted.

Unlike SMS, there is currently no standard pricing model between operators for RCS In order for RCS to grow, RCS pricing should reflect the pricing of SMS, with a price‑per-message model. This will increase the familiarity of RCS, in a similar fashion to established SMS practices, which will be key to attracting high-spending enterprises that operate on an international scale.

The Growth of RCS-capable Users

Juniper Research anticipates that following the roll-out of RCS on iOS devices, the total number of RCS-capable subscribers will reach 7.6 billion by 2028. 

Juniper Research has used in-house data on the total number of RCS-capable subscribers, as well as the proportions of Android and iOS devices in each country in order to predict the growth of RCS-capable subscribers globally. This also included data on the operators that have launched RCS in 2023.

Through the support of the RCS universal profile on iOS devices, this is expected to increase the total addressable market by 36.7% compared to without Apple support, with more than 6.3 billion capable subscribers by 2024.

The rise in the total addressable market for RCS increases the potential revenue for both CPaaS players and mobile messaging vendors, particularly those that are already established in the RCS market. Enterprises are expected to adopt RCS as part of an omnichannel approach to communicate with their customers. Juniper Research believes that RCS will become a primary channel for enterprises due to the large addressable user base, which will surpass the user base of any OTT messaging platforms.

Currently, WhatsApp has a higher number of active users globally than RCS, however, once Apple supports RCS, the number of active users is expected to be much higher than any single OTT app.

The support of RCS on Apple devices will also encourage operators to launch RCS, due to the increased revenue potential. This will further increase the number of mobile subscribers that are capable of receiving RCS messages.

Related Research

Global RCS Business Messaging Market: 2023-2028

CPaaS: Strategies, Opportunities & Market Forecasts 2023-2027

Global Conversational Commerce Market: 2023-2028

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