Is Skype the next Google?
Tomorrow, Skype launches its new app for the Iphone, and in May, the Blackberry gets one. I don’t know if the mobile phone companies are worried, but I’m thinking they should be.
The Financial Times says Skype’s cheap rates going mobile might not be a threat to the big telecoms, yet:
While Skype’s mobile and enterprise offerings give the company a toehold in two important markets, they are unlikely to disrupt major telecom operators in the near term. Instead, the new products may be part of Ebay’s positioning of Skype for a sale once market conditions improve.
Ebay isn’t talking sale, but shareholders are already getting restless with the $3 billion purchase, since Skype and Ebay don’t make much sense together. If Skype gets closer to its goal of becoming the “world’s leading communications software company,” I’m sure someone with brains will see it as a potential gold mine.
Silicon Alley Insider gives four reasons why Skype on the Iphone won’t be a threat to AT&T, which is the Iphone’s exclusive US carrier at the moment:
- To use Skype, you must be connected to a wi-fi hotspot.
- You can’t receive calls to your main number via Skype.
- You can’t receive calls on Skype unless the Skype app is open.
- You still have to pay your phone bill.
This is small potatoes stuff that might change. Om Malik at Gigaom has tried out the Skype Iphone app and his verdict: Awesome.
Read Write Web gives 10 reasons why Skype might be the next built-to-last tech company, along the lines of Amazon and Google. Among the reasons:
It has revenue, about $500 million in 2008. Ahem, only in the strange world of Web 2.0 is that considered remarkable. I love using Twitter, but without sustainable revenue their future has to be in question.
Just wait until it bites into those cell phone bills. Skype on mobile phones… has been held back by the mobile operator’s head lock on the device manufacturers. At some point the dam will break. Consumers pent up anger over nickle and diming cell phone bills will ensure that a real alternative will be welcomed.
I’m not a Skype-head like the author of that article, but I can see its appeal and potential for at least increasing mobile phone competition. Very few people saw Google’s success coming, save those who looked far enough down the road.
- Mar 30, 2009 2:05 PM — Scott Jagow
- 9 comments
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Comments (9)
March 30, 2009 3:09 PM PT
No, Scott..
Unlike most people who only peer into the world through Apple / RIM / Microsoft press releases, many of us in the tech field are already aware that Skype has had a presence on mobile devices at LEAST since 2005. I had an iMate JASJAR which came with Skype pre-installed. I could use Wi-Fi OR my internet connection through my phone provider (for whatever reason that was worth). Here’s a link:
http://skype.com/mobile/
Please (and this isn’t just Scott - you’re just the first blog I’ve seen on this..) - THIS IS NOT NEW!! Just because it has the ‘iPhone’ by it does not make it revolutionary. Skype did not diminish the cell phone companies 4 years ago. It will not do so now.
March 30, 2009 4:25 PM PT
Thanks for the info, Jason. I’m not talking about this because it’s “new.” I’m talking about it because it’s a potential step toward something. Getting on the iphone and the blackberry will increase the reach and usage significantly.
But the most important point is - if the President is able to push forward nationwide wi-fi, that could make Skype’s usage much more practical. I’m just saying, down the road, there is the potential that this takes off.
March 30, 2009 5:23 PM PT
Thanks for the response. Apologies for my earlier tone. It’s a bit frustrating for many of us in the tech field who see people become “amazed” at technology we were using 5 years ago.
Case in point - my iMate JasJar cell phone from 2005 had WiFi / Skype / full keyboard / and two cameras for teleconferencing. And complete tethering capability. Meaning: I used a wireless bluetooth (or USB cord, if you prefer) to connect to my PC and I piggy-backed an internet connection from my phone to my PC. Meaning, My pc had the internet anywhere I had a cell phone signal. Many phones still do this now (My Samsung Blackjack did that with a 3G connection 2 years ago).
Which leads me to saying I kindly disagree with you on nationwide wi-fi. With a $30.00 (on average) monthly fee, anyone with a cell phone (which is practically everyone) can have unlimited bandwidth through their cell phone. And although cell phone companies may change this practice, many phones can let you “surf” on your PC (and Macs too, I’d imagine) through your cell phone. So, if I can do that NOW, utilizing an unlimited data plan, what benefit would I get from the president’s nationwide wi-fi plan?
BTW - you might not get this from my earlier post, but I do enjoy your blog and marketplace. I miss hearing you in the morning, but I imagine the hours are a little better now.. ;)
March 30, 2009 5:54 PM PT
Thanks, Jason. Yes, the hours are much better. What I meant by the wi-fi potential isn’t about internet access - it’s that Skype is using wi-fi as the phone service, and it’s ridiculously cheap. If wi-fi was accessible everywhere, you could conceivably not need AT&T, Sprint, etc.
Right now, Skype is limited by the reach of wi-fi, and the quality is spotty too. But that could change, and that’s all I’m suggesting. This is theoretical.
Maybe Skype will remain appealing to a niche - people who call overseas. Seems to be enough to sustain the company now. But if the quality was good enough and you could get it everywhere, for the price, I’d consider dumping the nickle and diming cell phone companies, that’s for sure.
I guess we’ll have to check back in a few years!
March 31, 2009 7:21 AM PT
While not new, Skype has come along way in the last few years. My business is largely international. My customers pay a fortune for domestic and international calls. My customers turned me on to Skype as a term of doing business. I make and sell Chemicals, which is not a tech heavy field and most of my Skype conversations are with people 50 years and older. Meaning, where this is practical, people adopt it, and not just techies.
I even bought a stand alone skype phone (no computer, it plugs into a router / LAN) and dropped the phone company at home. I paid $30 for a year of having a land line phone number and another $2.95 / mo for unlimted US / Canada. Best of all, with the multipoint protocol, I can be logged in in many places at once. Meaning I can answer my home phone at my office or in another country, seamlessly.
If you set up your router correctly, call quality is identical to a regular phone, and much better than Vonage.
To Scott’s point with Jason: It already has the potential to seriously damage the land line based telcomms, but when / if Verizon rolls out its data based network or Sprint gets its Wi-Max out in major areas, this will spell trouble for the wireless carriers as well. That said, a decent Wi-Fi signal is much better than ATT’s 3G service for Skype. This poorer quality keeps me from using it in the car with my PPC and my bluetooth A2DP enabled car stereo. I have often assumed that ATT may intentionally insert pauses in the data flow, or at least QoS it to the bottom of the food chain, to make the useability of VOIP much less attractive. I wonder if anyone with Sprint’s Wi-Max (Baltamore, I think) can comment on the usage of skype through the wireless data network and if Sprint is downgrading VOIP traffic to protect their wireless phone business.
And yes, for 2 years I have used Skype for all calls from the hotel when I travel abroad, from my Windows Mobile pocket PC.
March 31, 2009 8:41 AM PT
iPhone 3.0 may offer the ability to run the app in the same way Mail runs letting you know of new mail (event notification push). The “receive main number calls on Skype” problem is something that can be handled too.
The WiFi restriction will require a hack but I’m sure that’s in the works as well.
March 31, 2009 3:51 PM PT
Scott, You forgot to tell us what Skype is. I never heard of it. There are of few of us out here like that.
March 31, 2009 4:24 PM PT
Sorry, Bob. You know what they say about people who assume. Skype is a software program that allows you to make phone calls over the internet. Calls between Skype users are free. There are fees for calling other landlines and mobiles.
So the potential for this, assuming that wireless internet access becomes much more widely available, is that people could call each other without needing a cell phone provider like AT&T or Sprint charging them for minutes. They could call from their mobile device and only require internet access. People who use Skype can do that now in a more limited capacity.
April 2, 2009 1:45 PM PT
I think we need to keep in mind the bigger picture that voice is just one type of data to transmit. The traditional twisted-pair carriers, the old ma bells, have already been hit hard by this. They’ve got hit by cell phone usage and by the old cable companies. When the latter upgraded their networks to provide high speed internet access, it was easy enough to do it in a way to also provide phone coverage.
As for cell phones, their costs have come way down both for the phone itself and time on the network. To the point where many people have decided it’s not worth having both around.
These cell phone carriers have already rolled out wireless data access. And they’re working on upping it’s speed and coverage. Not only that but it seems like the actual data coverage on the ground, the towers has shifted to having 3rd parties like American Tower take care of that aspect.
While Sprint or Verizon may not have a lot of incentive to gutt their core cell phone business by making it easy to use VOIP like Skype on a mobile device, companies like American Tower do. They just want to provide towers and bandwidth. They don’t care if it’s Alltell, Cricket or whomever else selling that bandwidth as part of their service to consumers. Plus a smaller cell provider like Cricket doesn’t have a lot of business to gutt by pushing selling mobile devices that run something like Skype. At least not compared to their potential upside.