Smartphones are poised for worldwide adoption, an opportunity Voxer CEO Tom Katis has been eyeing for five years. Sources tell us the smartphone walkie-talkie app is close to 70 million users, but Katis says “we’re not there yet.”
“We’re just at the beginning. This time around will be bigger,” says Katis. “The mobile boom is about to hit us.”
Taking a tour of Voxer’s new offices, the entire fifth floor of an elegant downtown San Francisco building to accomodate a team that’s doubled in less than a year, it’s clear Katis is preparing for “yet” to come.
It took five years for Voxer to reach its current milestones: $30 million in venture funding, 54 patents, and an international userbase that exploded last November, when it released an Android version of its app, which launched for iPhone in May. The free app merges voice and text messaging into a live, streaming conversation. Katis says smartphone users want to chat immediately and without the interruption of a ringing phone. Voxer developed a low cost way to stream voice, which was previously expensive, because it requires a lot of open server connections. The carriers are completely cut out of this model.
“If you’re working within a carrier network, you’re doomed. Apple and the App Store changed all that,” says Katis.
LA-based textPlus has taken a different approach, cooperating with carriers to gain its 35 million registered users in the US and Canada. It offers free unlimited texts and calls to any device with WiFi, from feature phones to tablets. Before the end of the year, textPlus plans to expand internationally starting with Germany and the UK.
“A big driver for our growth is that you don’t have to download an app to use us. All you need is WiFi,” says textPlus CEO Scott Lahman.
Unlike textPlus, Voxer’s success depends on the growth of smartphones. Katis confirms the app is adding more than 1 million users a week, but won’t comment on the total, saying the biggest growth market is the US followed by Brazil, the Middle East, Mexico and Thailand. With the cost of buying a smartphone lower than ever, adoption is way up. Analysts anticipate the US will move beyond 50 percent adoption this year, and that smartphone penetration will increase in China, Brazil, India, Russia, Indonesia, Pakistan and Mexico.
Voxer’s most obvious competitors are similar walkie-talkie apps HeyTell and Zello, and WhatsApp, a cross-platform instant messenger. PandoDaily’s Hamish McKenzie says South Korea’s KakaoTalk is the dark horse. KakaoTalk’s video- and photo-heavy mobile messaging has 50 million registered users, 3.5 million of them in the US.
Katis moved to Silicon Valley in 1997 and witnessed the collapse of the first bubble. He says he doesn’t know how this next phase will end, but he knows the mobile era has begun. As the social Web companies figure out their strategies, Katis says Facebook still has a good shot at getting it right. Expect to hear more about Facebook’s mobile struggles on today’s earnings call, the first since its IPO in May, which we’ve previewed here.
“A Web-centric world is moving to an app-centric world, and it must be embraced emotionally and culturally,” says Katis. “I think we’ll look back on Facebook’s purchase of Instagram as an incredible bargain.”