Firstly, let me say that I did not think that Twitter would replace SMS .. Until I say this wired article. Twitter Fast Growing Beyond its Messaging Roots
Twitter demonstrates the power of an Open platform with intelligence shifting to the edge and with unpredictable outcomes i.e. its designers could never have predicted that people would rig up a washing machine to send a tweet when the washing is done of that you could set up a security camera to send a tweet if it detects intruders
These were supposed to be SMS applications.
The old cash cow seems to be under threat ..
Why does this work?
Because SMS for all it’s success remained still a structured/managed/telecoms protocol. It was not easy to morph (Morph is from the Greek morphe meaning shape or form. For example, the word metamorphosis means a change in shape or form.)
Over the years, SMS has remained the same .. A core telco application which third parties could not easily change .. and now we have something that is free and malleable .. and it shows one more example of the success of Open Mobile strategies where value shifts to higher levels of the stack ..
SMS follows other lucrative network level services .. Starting with Voice(Voip) and then Location(cell id databses) and now messaging ..
An update based on comments from William Volk
and Alex Kerr
a) (William Volk) The reality is that I can launch a service, such as sending a message that updates traffic conditions at a major intersection or providing up to date news about a rock band, on Twitter … across all territories and operators at very low cost. The situation with SMS, standard protocols and all that hoopla included, is that it is practically impossible to do the same in any reasonable time frame or budget.
b) When I say ‘twitter’ I mean any similar service(which to be fair is very easy to set up). I use twitter as a representation
c) (William Volk) What Twitter has brilliantly done is create a broadcasting service with published protocols for delivering content into the service that is carrier and territory independent. Not only does it function with SMS nicely, it also works across multiple IM systems and on the iPhone alone … over 10 native apps. If Twitter is smart, they will come up with a unified billing solution. That would be a coup de grâce to the mobile operators control over text subscription services.