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Messaging mania: Nokia launches a WhatsApp phone while Kik raises $19.5 million

Published Apr 24th, 2013 10:45AM EDT
Messaging mania: Nokia launches a WhatsApp phone while Kik gets $19.5 million financing round

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Nokia on Wednesday launched a WhatsApp phone that includes unlimited WhatsApp messaging rolled into the retail price. And the retail price is just $72. The Asha 210 has a dedicated WhatsApp button that gives instant access to the service. This is a bold move, since it effectively means the hardware  is specifically designed to draw consumers away from SMS services, which are very lucrative for emerging market carriers. This move is the opening salvo in Nokia’s new bid to revive the flagging fortunes of its Asha feature phone line with new software features.

The new Asha phone brings deep WhatsApp integration to feature phone market — something that would have seemed ludicrous just two years ago. Several IP-based messaging services have grown explosively over the past year. The recent surge in LINE and Kik downloads in markets where WhatsApp has grabbed dominant market share implies that consumers are now open to running multiple messaging apps on their phones.

A few days ago, a second-tier messaging service called Kik received a fairly stunning $19.5 million in new financing. What makes this impressive is the fact that Kik nearly fizzled out during the summer of 2011.

After a splashy launch that turned Kik very briefly into the No.1 iPhone app in America in November 2010, it quickly tumbled out of top-500 and did not return to the top-200 until February 2012. Last summer, the app scrambled back to top-40 and became a steady top-5 Social Networking staple in America. Kik managed the comeback by becoming a teen phenom even as American adults latched on to WhatsApp.

This resurgence coincided with the remarkable success of LINE and Kakaotalk in Asia and certain European and Latin American countries. The past 12 months have basically delivered a remarkable free-for-all in the messaging app business, with the Japanese LINE app making a breakthrough in Spain and the Korean KakaoTalk racking up more than 10 million downloads in Japan.

Kik is still in the mix, even though it lacks the big power base that WhatsApp has in Europe, Line in Japan and KakaoTalk in Korea. Kik’s gimmick is offering consumers Cards, which are a bit like widgets. Most of the messaging apps are trying to transform themselves into social gaming platforms and effectively usurp the role of Facebook.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.