Huh. How does that work with multimedia? Do US carriers not differentiate between SMS and MMS?

They don’t, it “just works” (to the degree MMS can work at all) — which means iMessage is perfectly positioned.

Ah so do "free texts" in the USA include MMS? That might explain the continued usage. In the UK MMS often aren't included, if anything they're charged stupidly high, so you'd never send a pic via text message.

yes

To give you another perspective, I’m UK based too and use iMessage daily to stay in touch with my family and close friends. Every now and then I’ll have bad signal (or maybe the recipient does? I’m not entirely sure…) and whatever I’m sending will be sent as an MMS. It happens so rarely it doesn’t really register, and I’d wager it costs me less than a quid a year (on EE, but I assume most MMOs have similar MMS pricing).

On most plans in the US, unlimited texting is the only option, and there is no differentiation between SMS and MMS. It's all free with your plan.

Carriers typically charge the actual media portion of MMS (e.g. the photo or video) as data.

I'm not sure how universal that is, but it doesn't really matter when data plans are almost always unlimited. After all, iMessage also goes through cellular data.

To clarify:

On the iPhone, the Messages app handles SMS.

It also handles iMessage.

They are two completely different protocols, with iMessage's featureset being a superset of SMS's. If you are conversing with someone else with iMessage (either through an iPhone or another Apple device), Messages will automatically use iMessage; otherwise, it will use SMS. (If you prefer to use SMS, you are welcome to disable iMessage on your phone or other Apple device.)

iMessage goes over the IP network, not a side-channel in the cellular system the way SMS does—so you have to have either Wifi coverage or cellular data available; if you don't, as a matter of fact, it falls back to SMS within the same conversation, provided you are conversing with someone else who is identified by a phone number, and not just an Apple ID.