It's hard to make money in Mobile, China's Smartphone market

Now it may seem obvious that a small screen limits the amount of advertisements that can be displayed which then effects the revenue possible from mobile devices.  In addition with iMessage and others creation of messaging services SMS is under threat as well.

WSJ has a post that describes some of these conditions occuring in China.  Tencent is threatening the mobile carriers the same way iMessage is.

Among the biggest losers could be the telecom companies. HSBC analyst Tucker Grinnan estimates that SMS (short-messaging services) accounted for about 15% of China Mobile'sCHL -1.41% revenue in 2011. That's under threat from Internet-based messaging systems like Tencent's Weixin. From zero users at the beginning of 2011, Weixin grew to 100 million in March 2012.

It's no coincidence that China's SMS traffic per subscriber declined 7% over the same period, or that Internet giant Tencent is reorganizing its business to focus more on mobile.

Mobile ads as well.

China's social-networking and portal sites like RenrenRENN -4.11% and Sina Corp. SINA -5.16%are also struggling to monetize a growing number of mobile users.