A new report from Ovum (News - Alert), entitled "Social Messaging 2014 Trends to Watch," predicts that social messaging apps like WhatsApp, SnapChat and Line will have 2 billion users by the end of next year.

With social messaging apps, smartphone owners can send text, videos, photos and audio without paying their carrier's SMS charges. The messages can be sent over any cellular or Wi-Fi connection. Ovum predicts that social messaging app developers will add more social features into their apps such as games, stickers and sponsored accounts.

Line, a social messaging app developed in Japan, earns about $100 billion in revenue each quarter. Gaming generates about 60 percent of that revenue while stickers produce around 20 percent of earnings. Line is considering the addition of e-commerce offerings for both consumer-to-consumer and business-to-consumer transactions, but its central focus is on communications.

Jun Masuda, Line's chief strategy and marketing officer, told TechCrunch that Line is first and foremost a calling and messaging platform. "There's a fundamental difference between companies like us and Mobage and GREE," said Masuda. "Their SNS (social networking services) were based around games, so it was easy for users to quit the service quickly."

Ovum's consumer telecoms analyst and report author, Neha Dharia, says that social messaging apps will create a paradigm shift in social media. For example, if everyone in a person's family is on WhatsApp, and the smartphone owner is already using WhatsApp for free messaging, then the phone's owner has no reason to stick with Facebook (News - Alert).

Social messaging apps, because they are "mobile-first" services instead of services that moved from PC to mobile, were better designed from the outset to take advantage of all of the features of a smartphone.

Different social messaging apps monetize their offerings in different ways. Line devotes itself to gaming while WhatsApp offers a subscription model for usage. Facebook and Twitter (News - Alert) have only just begun to monetize their mobile offerings, which means that social messaging has plenty of funds—and soon will have plenty of users—to give social media a run for its money.

Maybe that's why SnapChat turned down $3 billion from Facebook and $4 billion from Google (News - Alert) earlier this year. Although some analysts thought SnapChat's stakeholders were crazy to refuse, Ovum's new report means that SnapChat's choices may have been more along the lines of "crazy like a fox."