Line was launched in the aftermath of Japan’s 2011 earthquake and tsunami and has become particularly popular among teenagers in Asia since its application combines instant messaging with shopping, gaming and other features such as letting users send each other cute cartoon “stickers,”
Line, which says it has more than 400 million registered users in Japan and other parts of Asia, lets users make free calls, send instant messages and post photos or short videos.
The app's a big deal - around 88% of Japanese smartphone owners use messaging apps such as Line, according to a survey by the Communications and Information network Association of Japan.
It's coming at a cost of telco revenues, with social messaging apps like Line and WhatsApp, which was recently acquired by Facebook, costing telcos $30 billion in lost revenues this year.
The Line app was launched back in 2011 by the Japanese unit of South Korean Internet service provider Naver Corp, after the quake-tsunami tragedy damaged telecoms infrastructure nationwide, forcing millions of people in Japan to resort to online resources to communicate.
The market now is much more crowded, and fierce.
“Competition among messaging applications is heating up worldwide,” said Hitoshi Sato, senior analyst at InfoCom Research, Japanese telecom giant NTT group’s research arm.
“Line’s challenge is how to diversify its sources of profit in the future.”
Neha Dharia, senior analyst at technology research firm Ovum, said in a report that the listing "makes perfect sense as it will not only raise its profile further in the market, but it will also provide them with adequate funds to strengthen their product offering".
Analysts warn messaging app users are fickle.
"At the moment, Line has good revenue from game and stickers. But the other messaging apps can easily and quickly imitate and take the place of Line's current position," Sato said.
Line gave no further details on its IPO, including the possible size of the deal.