[jws]

Meanwhile, every Apple user’s photo library will be half the size compared to JPEG. For many users photos are the single largest category in their iOS device storage. More importantly for Apple, they (want to) store everyone’s photos in their cloud, so they need half the storage and bandwidth to pull that off.

For sending to other people, most photos are going to be downsized anyway so a transcoding isn’t the end of the world.

[dannyw]

Apple doesn't like downsizing messages. iMessage sends full resolution, multi-MB pictures.

[huangbong]

Irrelevant because we are talking about compression formats.

[planb]

That's a setting - though I don't know the default.