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Software // Enterprise Applications
11:01 AM
David Ewalt
David Ewalt

All Eyes On Cell Phones

SMS messaging is popular overseas. Will it become an important communication tool for U.S. businesses?

Steve Pelletier isn't talking to his assistant or co-workers at Sun Microsystems as much as he used to. It's not because the VP of network identity, communications, and portal products is feuding with them. It's just that he's found a better way to communicate, one that's real time, adaptable, collaborative, and dirt cheap. Pelletier and many other Sun executives communicate via SMS text messaging over their cell phones. "SMS is hugely valuable to me from a business standpoint," he says. "My assistant and I use it regularly. She doesn't even try to call me now, because it's so convenient."


SMS is convenient and valuable for business uses, Sun VP Pelletier says.

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SMS, or Short Message Service, is a text-messaging cell-phone technology that's a hit with teenagers and businesses in Europe and Asia and is gaining a foothold in the United States. The growing proliferation of cell phones means that just about all mobile-phone customers have the hardware and software they need to send and receive SMS text messages. It's easy to use once you master the ability to type on tiny cell-phone keys with your thumbs. And it's cheap, especially when compared with the high cost of phone calls overseas.

SMS has other advantages, and some analysts believe it will become a major form of personal communication for the same reasons E-mail has replaced many phone calls. The recipient doesn't have to be there to receive a message; it's quick and unobtrusive and eliminates the risk of getting stuck in a long conversation. SMS shares these benefits and boasts a few others: It can be accessed most anywhere without a computer.

No one is predicting that SMS messaging will be as big as E-mail. But it has already proven its worth in Europe and Asia. According to research firm IT Analysis, cell-phone users worldwide send more than a billion text messages a day from one mobile phone to another, an average of one message a day per subscriber. In Western Europe alone, 186 billion messages were sent in 2002, according to consulting firm Frost & Sullivan. By 2006, that number is expected to reach 365 billion.

So what do all those messages say? "The most common application is friends pinging friends," says Greg Wilfahrt, executive VP of Inc., an SMS platform and messaging service and application provider. SMS "is affordable, it's instant," Wilfahrt says.

And it can be more than just a consumer tool. Some businesses around the world are finding ways to benefit from the technology.

Take some financial-services providers: HSBC Bank plc in the United Kingdom offers customers regular updates on their account balances. Irish brokerage Goodbody Stockbrokers sends its clients stock quotes. Deutsche Bank AG issues SMS transaction receipts to mutual-fund holders across Europe. And U.K. credit-card company Barclaycard will message customers if it detects unusual activity on their accounts in order to identify lost or stolen cards.

SMS also helps people and packages get around. Passengers on more than a dozen airlines, including British Airways, Air Canada, and Lufthansa, can sign up to receive flight-status updates. United Parcel Service Inc. customers in eight Asian countries can enter a package number in a text message to get tracking information.

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