Here's Why LINE Is So Important In The Mobile Messaging Wars

The race to become the most popular mobile messaging app is heating up - and the competition is surprisingly stiff.

While most are aware of frontrunner WhatsApp, with more than 500 million monthly active users, lesser known Japan-based LINE has also been growing users extremely fast. Last week came reports from Bloomberg that the company may be preparing for an IPO sometime this year in both Tokyo and the United States.

According to BI Intelligence's tally, LINE trails front runners WhatsApp and WeChat, raking in nearly 250 million monthly active users.

What LINE has that WhatsApp has yet to harness is a number of different revenue streams through in-app purchases, stickers, and marketing and ad products.

This established revenue stream is what could make LINE so successful once it goes public. Julie Ask, principal analyst at Forrester, explained to BI Intelligence via email that LINE's monetization strategy gives the company the biggest chance at success. Even though only a small percentage of users actually pay for LINE's many services, it costs LINE very little to create and offer these add-ons, making it an easy way to generate revenue. "Too many companies dismiss this model," she wrote. Nonetheless, in order to truly transform LINE from a one-off app into a profitable public entity, Ask believes LINE still needs "the audience and scale first."

BI Intelligence prepared the chart below, which shows how LINE's revenues grew through much of last year by product category.

BI Intelligence has been closely tracking the mobile messaging wars, with a recent report on growth and monetization trends at the biggest messaging apps.

In full, the report:

• Looks at why mobile messaging apps have been so successful, and how they're becoming platforms in their own right for gaming, payments, and communications
• Tracks user growth for seven of the top global messaging apps - WhatsApp, Facebook Messenger, LINE, WeChat, Viber, Snapchat, and Tango
• Examines which of the various revenue streams available to messaging apps could prove most successful and inform how WhatsApp eventually monetizes
• Uses LINE as a case study into the various monetization strategies available to messaging apps

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