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Device operating systems

Windows Phone's Missing Piece: Skype

1:35 PM -- Microsoft Corp. (Nasdaq: MSFT) got a lot of praise at the Consumer Electronics Show last week for its Windows Phone operating system, but there was one glaring omission: Skype Ltd. (See Nokia Illuminates Its Flagship Windows Phone and OS Watch: Gadget Makers Soften Up at CES.)

The voice-over-IP company Microsoft spent $8.5 billion on was nowhere to be found on its new phones. (See Microsoft Completes Skype Acquisition and Microsoft to Buy Skype for $8.5B .)

When the company acquired Skype back in May it promised future Windows Phones would come equipped with Skype's real-time voice and video communications platform, something it reiterated at CES, but its first devices actually included competitor Tango Networks Inc. 's VoIP service instead. Windows Phone is actually the only major OS to lack a Skype app. (See Microsoft Plans a WP7 Skype Soiree.)

My guess is that Microsoft is holding back on its plans for the VoIP service as its first priority is to convince the wireless operators to champion Windows Phone. Although they've loosened up a lot about Skype -- some even embracing it -- Microsoft still runs the risk of alienating them by putting a competing voice and video calling service front and center on smartphones. (See Skype's Latest Telco Friend, VoIP's Not the Devil, Says O2 UK Chief and Why Mobile Operators Like Skype .)

Microsoft is wise to tread carefully, given the prominent role the wireless operators play in the equation, but it shouldn't hold back for much longer. Skype represents a powerful differentiator for the OS. It's not just a voice-calling alternative, but also a tightly integrated video chat app, allowing group calls and instant messaging.

If they build it in, the wireless operators will come around. What they should realize is, more choice and better communications lead to more subscribers toting smartphones with higher data plans. And that's good for the OS and the operators.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

kaps 12/5/2012 | 5:45:14 PM
re: Windows Phone's Missing Piece: Skype

"Sure you can use Skype, as long as you pay for a voice plan." That doesn't sound like Skype's original business model or how it disrupted landline voice. And that can't be useful for wireless. Ultimately, you want to use Skype so you *don't* have to pay for voice. Ah, if there only were choice of providers! Or one willing to offer data-only for phones.


It will get there, maybe. Microsoft's track record with VoIP is terrible in many ways because it couldn't push VoIP while keeping good relationships with carriers (remember a long time ago Microsoft wanted to sell those same carriers video platforms so... no VoIP). No reason to expect that it will do any better with wireless, even if it paid billions for Skype.

kaps 12/5/2012 | 5:45:14 PM
re: Windows Phone's Missing Piece: Skype

"Sure you can use Skype, as long as you pay for a voice plan." That doesn't sound like Skype's original business model or how it disrupted landline voice. And that can't be useful for wireless. Ultimately, you want to use Skype so you *don't* have to pay for voice. Ah, if there only were choice of providers! Or one willing to offer data-only for phones.


It will get there, maybe. Microsoft's track record with VoIP is terrible in many ways because it couldn't push VoIP while keeping good relationships with carriers (remember a long time ago Microsoft wanted to sell those same carriers video platforms so... no VoIP). No reason to expect that it will do any better with wireless, even if it paid billions for Skype.

sarahthomas1011 12/5/2012 | 5:45:14 PM
re: Windows Phone's Missing Piece: Skype

The wireless operators that work with Skype now (like Verizon) require a voice plan, so that consumers can't get around it. I tend to think they can't avoid a service like Skype for long anyway, so they need to figure out how to work with it. Your VoLTE point is a good one too.


The value Microsoft adds is making it seamless on Windows Phone - always choosing the best way to call, chat or use video without the consumer doing much, as well as integrating it into the entire OS experience.

kaps 12/5/2012 | 5:45:14 PM
re: Windows Phone's Missing Piece: Skype

That's the cheapest national wireless voice plan from either Verizon or AT&T -- $40 a month on your postpaid bill. Usually for around 450 minutes a month. And that is the table stakes for any new phone contract. You start at $40, then add in all the other charges. Do the math by the number of postpaid subscribers and you will see why it may be longer than you think before a full version of Skype arrive on a carrier-supported Windows phone.


This story could and should probably be linked to the one up today about VoLTE adoption. Until voice moves over to the more-efficient 4G networks Skype will be an unwelcome killer of the voice minute. As a customer I say "go Skype" since destruction of the minute-charges is one of the final barriers to real wireless innovation. But I don't think that cheer is being sounded in the AT&T or Verizon boardrooms.


The day may be coming when we see data-only contracts for wireless... but it's not today. Or tomorrow.

kaps 12/5/2012 | 5:45:14 PM
re: Windows Phone's Missing Piece: Skype

That's the cheapest national wireless voice plan from either Verizon or AT&T -- $40 a month on your postpaid bill. Usually for around 450 minutes a month. And that is the table stakes for any new phone contract. You start at $40, then add in all the other charges. Do the math by the number of postpaid subscribers and you will see why it may be longer than you think before a full version of Skype arrive on a carrier-supported Windows phone.


This story could and should probably be linked to the one up today about VoLTE adoption. Until voice moves over to the more-efficient 4G networks Skype will be an unwelcome killer of the voice minute. As a customer I say "go Skype" since destruction of the minute-charges is one of the final barriers to real wireless innovation. But I don't think that cheer is being sounded in the AT&T or Verizon boardrooms.


The day may be coming when we see data-only contracts for wireless... but it's not today. Or tomorrow.

shygye75 12/5/2012 | 5:45:13 PM
re: Windows Phone's Missing Piece: Skype

Isn't voice well on the way to being a niche nuisance service for mobile operators?

shygye75 12/5/2012 | 5:45:13 PM
re: Windows Phone's Missing Piece: Skype

Which is ironic because we're the ones who probably have the hardest time dealing with the substandard call quality. WHAT? WHAT? You're breaking up! Hello? HELLO??

sarahthomas1011 12/5/2012 | 5:45:13 PM
re: Windows Phone's Missing Piece: Skype

Yeah, only people over 35 make voice calls today.

Gabriel Brown 12/5/2012 | 5:45:11 PM
re: Windows Phone's Missing Piece: Skype

Your point is a good one. Microsoft & Nokia are proclaiming how operator-friendly they are to get the marketing support. Meanwhile, operators would prefer to see native VoLTE and RCS capability built into the OS before they start pushing Skype.

 

How this resolves will be interesting. I use Skype mobile video, and I like it, but ultimately a richer service that is standards-based and interoperable will be better for end-users and the broader industry.

Gabriel Brown 12/5/2012 | 5:45:11 PM
re: Windows Phone's Missing Piece: Skype

You could view the voice charges as a subsidy on the data, which perhaps look artificially cheap?

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