Facebook’s US$19 billion acquisition of chat app WhatsApp shook the startup world by storm in the past week, and the implications still reverberate today. The biggest question, of course, is whether the chat platform was worth the price. Meanwhile, Facebook’s strong presence at Mobile World Congress (MWC) in Barcelona this week is an indication that the social network is serious about getting the next billion or so mobile users online, even if that means accessing the internet through a mobile device with a small screen and slow wireless network.
Facebook is set to conquer the mobile world, even with “crappy phones and bad networks”.
While the acquisition can be seen as worrisome, not all chat app developers are concerned that Facebook and WhatsApp will be stealing their thunder. In fact, the acquisition means, if anything, that the market for over-the-top (OTT) services is just starting to boom, and the usual carrier model — with public-switched telephony and SMS-based messaging — might be in trouble. Mobile users in the developing world stand to gain the most with OTT apps that offer voice and text. In the future, carriers might do better business by offering data-centric plans and services.
e27 had an exclusive conversation with Arnie Chaudhuri, Co-founder and Head of Business Development, Chaatz, a Singapore- and Hong Kong-based startup that has built a messaging platform meant to connect all kinds of mobile devices. Chaatz launched its iOS application a few weeks ago, and today, the Chaatz Android app is likewise available on Google Play. Getting the smartphone app in place is just the initial tactic, part of Chaatz’ long-term strategy of expanding to the mobile ecosystem in general, says Chaudhuri. The long-term goal is to connect everyone, especially those using feature phones and even those still connected to slow networks.
Not just for Android and iOS
Apart from the Facebook-WhatsApp deal, another big piece of news in the mobile world is Nokia’s launch of the Nokia X, a device powered by the Android Open Source Project (AOSP), but which runs Microsoft’s and Nokia’s own services layer. The Chaatz team actually has a soft spot for Nokia, having built the company’s first pre-Ovi app store, and likewise developing 3D games and apps during the Finnish company’s Symbian era.
It’s not just Nokia, but feature phones in general, that Chaatz mainly wants to service. “Here in Asia, we like Nokia because it simply works,” says Chaudhuri, noting that feature phones are usually reliable devices that have long battery spans. “We want to bridge the gap between smartphone and feature phone,” he adds, citing that in places such as the Philippines, Indonesia, Brazil, Mexico and most African countries, feature phones are still the dominant mobile device. Case in point: in the Philippines, 75 per cent of mobile users are using feature phones. The question is how these users can easily — and cheaply — chat with friends and family members who are abroad.
“It’s great what Viber, WhatsApp and Facebook messenger are doing for the smartphone market,” Chaudhuri says, further asking, “But who’s looking out for the rest?” He adds that the cost of SMS can be prohibitive in emerging markets, especially if messages are to be sent abroad. “Carrier pricing is significantly high, usually because of infrastructure cost. The best way is to go OTT with feature phones, to bring the cost down,” he says.
Upon installing Chaatz for Android, this writer noted that the application does not make use of Google Cloud Messaging (GCM) for push notifications. To some, this might be a concern, especially those who want to minimise resource usage for inactive or background apps. Chaudhuri clarifies that the development team uses Amazon for push messaging because it wanted to support a wider platform base.
“We have to work with all smartphone and feature phone manufacturers. Some Android phone-makers don’t ship their devices with Google Play. Without Google Play Services framework, GCM will not work,” he says.
Chaudhury gave a few examples, such as Cherry Mobile in the Philippines and India’s Micromax and Karbonn, which produce devices aimed at the low-end of the market. Most of these manufacturers’ phones come with Play Store, but devices that are not certified by Google for GMS licensing have to make do with third-party application marketplaces. Even Amazon’s Kindle Fire platform and Nokia X do not support Google Play.
Hence, Chaatz is again looking out to support the most devices possible. In fact, the company is planning to make a big play in wearable technologies. “Smartwatches and smart glasses will be relevant to internet messaging,” says Chaudhuri, citing as an example use of a wearable device as a means of filtering incoming messages while doing other activities. You cannot always take out your phone from your pocket, he says. But if your Google Glass gives a notification, and the message is from an important person, then you might want to stop for a while and read or even reply.
Growth comes first
In terms of business model, messaging is always going to be free for the consumer, says Chaudhuri, adding that there will be “no ads in messaging at all”. The company plans to monetise its services down the road through different models, which can include licensing deals, revenue share with carriers, and distributing content through the platform.
For now, Chaatz just wants to push its app out and grow the user base. The company is working with carriers in India, which could give the network access to a potential market of 100 million users from one particular carrier alone. It seems Chaatz is taking different approaches depending on the market. For the developing world, it will do well to partner with carriers and handset manufacturers in distributing and providing access to the app. In the developed markets, the app will be accessible through the established app marketplaces like iTunes and Google Play.
“The mobile industry is witnessing a shift in perspectives when it comes to telephony and messaging. Now, data is more important, and in the future, data, mobile broadband and WiFi networks will be more accessible,” says Chaudhuri.
Chaatz has big dreams for connecting the world, similar to Facebook’s own aims: “We intend to go into voice at some point. Basically, we have launched a social messaging platform, not just an app. Our whole mission is to connect everyone in the world, no matter the device.”