Report: Google works on Chat service to replace Allo

Brief:

Google is rolling out a mobile chat service to replace standard texting, giving Android users advanced features already found in popular chat services such as Apple's iMessage and Facebook's WhatsApp. The service, simply named Chat, isn’t a standalone messaging app and will run on Android phones as Google partners with mobile carriers globally, per the Verge.
Chat offers upgrades for Android users whose messaging relies on SMS, or short message service, the text-based platform that was widely accepted but didn’t offer rich features like high-resolution pictures, videos and GIFs, read receipts, group messaging or typing indicators. Chat is a consumer-friendly name for a standard called Rich Communication Services that is intended to replace SMS. As part of the shift to Chat, Google is “pausing” work on messaging app Allo, per the Verge.
Sprint supports Chat between compatible Android phones in the United States, while T-Mobile will do so this year. AT&T and Verizon quietly agreed to support the standard in the past few months, but haven’t offered a timeline on a rollout, per press reports.

Insight:

Chat, which is being developed by Google but will be a carrier service, could create major opportunities for mobile marketers to have richer communications with Android-using customers who have downloaded other apps like Facebook Messenger for their more advanced features. The GSM Association (GSMA) estimated that 350 million people will use RCS by the end of 2018, and that number will double next year. Many low-cost phones won't be able to use the new messaging standard, but GSMA estimated that 3 billion people may upgrade to RCS. The standard will give carriers an opportunity to sell RCS services to businesses, a market that the GSMA estimated will grow to $74 billion by 2021.

While Chat is a big improvement to SMS, the new standard still has its detractors who say it isn't as good as Apple iMessage or WhatsApp, which offer end-to-end encryption. That means messages potentially can be intercepted by prying governments, law enforcement or malicious hackers.

Because Google is making Google Assistant compatible with Chat, messages can’t be encrypted if they are to be read by the voice-powered digital assistant. RCS messages are sent through the Internet, but a Chat message sent to a person whose phone is not Chat-compatible will be sent using SMS, per the Verge. The lack of encryption may mean that Apple, which is a strong supporter of data privacy, won’t support the new standard. IMessage is one way that Apple has locked users onto its platform while also letting them avoid messaging fees of some carriers. Despite the lack of encryption on RCS, Android users who want privacy can still download apps like Confide, Signal, Telegram or WhatsApp for encrypted messaging with other users of the same app.

Google has a long history of working on messaging solutions, but Android hasn’t kept up with Apple’s iMessage that’s preinstalled on every iPhone, or Facebook's two messaging apps, WhatsApp (1.5 billion users) and Messenger (1.3 billion users). Google in 2016 released Allo into an already crowded field, and managed to build a user base of 50 million people, and introduced Duo as a video chat service to compete with Apple’s Facetime. Google Wave, Google Buzz, Gchat and Google Spaces were all abandoned, per Gizmodo.