The story of texting in 2011 is one of David and Goliath. SMS – the Goliath of mobile messaging – has been under attack from numerous upstarts, some not so small.

iMessage, included in iOS5, represents perhaps the boldest attack, enabling users to invisibly bypass SMS when they both use iOS devices. RIM’s BlackBerry (News - Alert) Messenger has a strong and dedicated user base. Startups like Groupme, Kik, and WhatsApp have leveraged mobile development environments to introduce SMS alternatives. Chat services, available for almost a decade on PC, have been making the move to mobile, including Skype (News - Alert), Windows Live Messenger, and Yahoo Messenger. Indeed, TechCrunch declared Oct. 12, 2011, (the release date of iOS5) as they day SMS began to die.

However, as Mark Twain said, “Rumors of my death are greatly exaggerated”. SMS usage is strong, and growing. According to Portio Research’s January 2011 report, 6.9 trillion SMSs were sent in 2010, and the number was expected to break 8 trillion by 2011. Some analysts believe the growth is starting to slow, but there is certainly no doubt that SMS is still the dominant player in mobile messaging.

SMS has one major advantage – its network effect. Billions of users can be reached through it – almost anyone with a mobile phone number. However, it has many disadvantages. There are five in particular, each of them representing a point of attack for one or more of the new players in this space. What are those five? They are – in order of size of the weakness – multi-device, cost, real-time, grouping, and rich text.

Multi-Device

Today, SMS service is bound to a mobile phone number, and mobile phone numbers are bound to a single device. Yet, today’s users have multiple devices from which they’d like to communicate – tablets, iPods, laptops, and desktop computers. This gap is becoming increasingly obvious as Internet services become more cloud centric – allowing users to seamlessly move between devices without loss of functionality. Many of the SMS alternative applications offer this capability.

Cost

SMSs are expensive, though pricing varies. Verizon (News - Alert) Wireless, for example, charges 20 cents per message on a pay-as-you-go plan. For heavy texting users, these costs quickly add up. At 140 bytes per message, this is .14 cents/byte. Compare this to using the data channel; Verizon charges $30 for 2GB of data, which comes to .000003 cents/byte – over 47 thousand times cheaper per byte compared to SMS. Using applications like Skype or iMessage provides significant cost savings.

Real-Time

Today, SMS is fire-and-forget. There are no guarantees on delivery time, and delivery can take a long time. Furthermore, there are no tools that help users have a more interactive, real-time conversation. As an example, most instant messaging applications support the familiar “is typing” indicator. This indicator makes the conversation more real time by letting one user know that the other is typing a response. This feature is absent in SMS. iMessage, for example, addresses this gap by providing is-typing indicators when sending an iMessage between iOS users. It also provides faster delivery.

Groups

SMS is one-to-one. There is no notion of groups – the ability to send a message to a group of users, and for the participants to reply, and for the reply to go to everyone as well. A group feature would also allow users to know the other participants in the group (roster). Groups are a fundamental part of any social interaction. If the role of chat or texting or calling is to virtualize a real-world interaction, people interact in groups all the time. Indeed, most of our most social real-life interactions are group-based – parties, dinner with friends, watching a movie together. Chat products, like Skype, have supported group chat for many years. Groupme’s primary purpose is to add a chat overlay on top of SMS, rather than replacing SMS for one-to-one communications.

Rich Text

SMS is text only, limited to 160 7-bit characters. There is limited support for long messages, and no support for advanced text (fonts or styles), embedded images, emoticons, or multimedia content. Some of these limitations have been addressed by MMS, though MMS is a separate service and has less uptake than SMS. Rich text features have been supported by most chat applications for years.

These weaknesses are substantial. SMS is an old service with a long history, and it shows. In the end, these limitations have not impeded its success. Its network reach – a property that has taken decades of carrier federation to achieve – are an incredibly valuable asset and a difficult one for a competitor to achieve. The SMS alternatives need to address the gaps – which are many – but also overcome the network effects challenge of competing with SMS.

But really, the battle has just begun. Will one (or many) of these solutions emerge as the David of messaging, overthrowing SMS as the primary vehicle for mobile messaging? Only time will tell.

Jonathan Rosenberg is chief technology strategist at Skype (www.skype.com).

 This article originally appeared in the Jan. issue of INTERNET TELEPHONY magazine.