MMS may go the way of the dodo, I don't know.
But SMS usage is going through the roof, it's certainly not 'legacy'. A recent UK report showed call revenues from the networks decreased for the first time recently, while SMS revenues are up and up. If anything is legacy, it's voice-calling!
SMS revenues? That's part of the problem! You're viewing this through the antiquated lense.
SMS is just data. A limited and inconvenient form of data that as far as the network is concerned is the same as every other piece of data on the network, but because you've had 10 years to use it, you think it's convenient, and because the networks have had 10 years to bilk you for it, they think it's a profit center.
I'm sorry, but it's just data. Artificially pricing different for it to make more off the customers doesn't change that. It isn't magic binary.
Email isn't limited by the char limits. Email isn't charged per email because they haven't buffaloed customers into thinking it somehow has to be so.
Flatten the pricing and remove the limitations and what have you got? Email.
SMS is on the iPhone as a handy way of getting instant messages piped over an AIM gateway. Use it in the legacy manner, but it's the newer means that most people I know will be using it for.
No form of IM is going to replace SMS until the IM-on-phone user base achieves a critical mass, which include your grandfather, your young niece, your technophobe aunt etc..etc.. SMS messages reach everyone with a recent phone, IM still only reach a small subset.
And no computer will ever need more than 640k.
See, I'm not predicting the future, I'm looking at the dead technologies that don't know their time is up. You've got a better crystal ball than I do.
Plus, one of the attractions of SMS is it's non-intrusive 'answer when you're ready' nature. I don't think the more chat-orientated nature of IM has the same widespread appeal.
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Actually, chat, IM, etc. are all 'answer when you're ready.'
Once the data-plan prices come down here though, I'm sure IM will have it's day. But SMS has a LOT of life in it yet!
As a vehicle for IM. Email replaces MMS.