Summary
The wireless penetration has reached 91% in the US in 2009. With billions of SMS messages sent every month in US alone, it has become the most effective and cost efficient mechanism to communicate and market. By surrounding the user with opportunities to connect, SMS can lead to multiple interactions over SMS or other mobile channels. Including SMS as part of application marketing is critical for user acquisition, retention and monetization.

This report evaluates the SMS ecosystem and value chain including components invested in the potential of SMS and supporting technologies. It provides a case study of companies who have benefitted from this service in infotainment services like music and games.

Table of Contents
1. General  8
1.1 The story behind SMS success 9
1.2 Types of SMS 10
1.3 SMS Applications 11  
2. Technical 13
2.1 External Short Messaging entities 13
2.2 SMSC 13
2.3 HLR/VLR 14
2.4 MSC 14
2.5 BSC 14
2.6 BTS 14
2.7 Mobile device 14
3. Market overview 15
3.1 Content provider 16
3.1.1 Short codes 16
3.2 Application developers 16
3.3 Aggregators 17
3.4 Marketing agent 17
3.5 Value Chain Analysis 17
3.5 Future market forecasts 18
4. Case study 20
4.1 Music 20
4.2 Gaming 20
4.3 Greetings 21
4.4 Health 22
4.5 Language 23
4.6 SMS in satellite phone networks 23
5. SWOT 24

List of Figures
Figure 1: Wireless Penetration in US
Figure 2: SMS message volume globally
Figure 3: SMS system architecture
Figure 4: SMS ecosystem
Figure 5: SMS Value chain analysis
Figure 6: Role of an Aggregator
Figure 7: Value chain analysis of P2P messaging
Figure 8: Value chain analysis of A2P messaging
Figure 9: PlayNow arena
Figure 10: Mafia Wars SMS service
Figure 11: Reaching the Hispanic market with SMS