Competition Factors In The Chat App Market

There’s a wide array of chat, messaging and conferencing apps available now, so some people may have trouble picking one. However, privacy is an important issue that can’t be overlooked, and the trend among the big apps like Facebook’s WhatsApp is less privacy. In contrast, smaller ones like SnatchApp take steps to secure users’ privacy. […]
Competition Factors In The Chat App Market
Image credit: terimakasih0 / Pixabay via Valuewalk

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There's a wide array of chat, messaging and conferencing apps available now, so some people may have trouble picking one. However, privacy is an important issue that can't be overlooked, and the trend among the big apps like Facebook's WhatsApp is less privacy. In contrast, smaller ones like SnatchApp take steps to secure users' privacy.

Q1 2021 hedge fund letters, conferences and more

For many users, corporate and individual alike, privacy is the number one factor affecting their decision about which chat apps and conferencing apps to use, and it's starting to show. S&P 500 giants like Microsoft, Facebook and Alphabet, which all host chat or conferencing apps, are watching their share of the market decline, thanks to more pro-privacy choices like SnatchApp, Zoom and Signal.

New chat apps starting to overrun WhatsApp, Skype and Google Meets.

Earlier this year, The New York Times reported that tens of millions of people downloaded Signal and Telegram within one week. Signal drew users with its promise of end-to-end encryption, which means only the sender and recipient can read the message's contents. Telegram also offers some encrypted options, although it mainly draws users to its group chat rooms.

Several events triggered the surge in popularity in January as users became anxious about some of the big tech companies that control messaging apps are doing. For example, Facebook and Twitter removed thousands of conservative accounts, including President Donald Trump's, after the storming of the capital. Additionally, Google, Amazon and Apple cut off support for Parler, a social network popular with conservatives.

WhatsApp on sharing data with Facebook

Meanwhile, WhatsApp users started to worry after the app displayed a reminder to users that it shares some of their data with Facebook. When Facebook originally bought the messaging app, users could opt-out of having the app share their information with Facebook, but that's no longer the case.

As a result, millions of people migrated away from once-popular chat apps and toward those that offer more privacy. According to data from Apptopia, Telegram added more than 25 million users in just three days. The founder of Telegram, Pavel Durov reportedly said that his secret, in contrast to Facebook and Whatsapp, is simple: it is about respecting users when it comes to privacy. Signa alsol added almost 1.3 million users in one day after averaging only 50,000 downloads per day last year.

Corporate users are thinking about privacy too, but that's not all

When Zoom CEO Eric Yuan discussed security, he said  in a blog post "We recognize that we have fallen short of the community's -- and our own -- privacy and security expectations," and noted  "For that, I am deeply sorry." Indeed these are the type of opportunities that competitors would capitalize on if they can provide more features, as discussed below.

SnatchApp is drawing corporate users with more than just robust privacy settings. The company wants to keep its app as the most private and secure messaging option to go against competitors like Signal. But unlike Signal, SnatchApp is looking to focus on corporate usage. The pandemic caused many companies to fail because they couldn't transition to the online world, but SnatchApp is also focusing on helping companies manage tasks and client consultations.

The app is also unique because it provides access to an omnichannel chatbot platform; Which means that users can build their bot without having any coding skills. The bots built on SnatchApp's bot-building platform can also be used on Facebook Messenger, Skype, WeChat, Slack and other popular platforms, making it friendly for businesses to manage employees on many platforms.

SnatchApp co-founder Avi Benezra says, "Demonstrating industry leadership on privacy and security paved the way to high adoption rates in the corporate world, although being the only chat app that incorporates both money transfers and an AI-powered chatbot functionality really helped push us over the 1M user mark across different operating systems." Together with his brother Henri Benezra, they have built a fast-to-market strategy that has a 5 year lead over Microsoft on no coding chatbots which forms part of their arsenal to carve out a unique footprint in both the chat app and chatbot markets.

However, there is cutthroat competition in the messaging space. A review of the App store shows a plethora of well designed messaging apps competing in both the social and corporate messaging markets. Viber, Pulse and Textra are just a few of the names, and that is all before the hottest name in the space is considered Zoom.

Why users started to choose Zoom over Skype

Privacy isn't the only reason users change the messaging apps they use. Indeed, Zoom, which has become the go-to app, has been criticised over some of its privacy practices. Started by Eric Yuan, a Chinese-American, Zoom attracted a lot of attention and users during the pandemic as businesses worldwide looked to it for video conferencing services. However, there was a time when Skype was the go-to app for corporate use, so what happened?

ZDNet asked its Twitter followers and users why Skype has all but disappeared, while Zoom has taken over in the corporate sector. The tech blog found three main reasons. The first is that Zoom is a lot easier to use than Skype, which means even people who aren't tech-savvy can easily pick it up and start using it.

The second is that Zoom has fewer bugs than Skype, and the third is that Skype is filled with spam. It's virtually impossible to open up Skype without seeing a pile of spammy messages waiting for you. Skype was ahead of its time many years ago, but it has since fallen behind the times, leaving an opening for Zoom to climb during the pandemic.

There is more competition than ever before in the messaging and conferencing space. Skype, WhatsApp, and other big players have made plenty of mistakes that smaller competitors can exploit. The big question VS’s and investors ask, is which of these small fast-movers will become the next communication giant.

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