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Is Skype Speeding Along its Own Demise?

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Skype is making it clear that it doesn’t want third-party clients using its services. First, Fring for iPhone lost Skype support (though there was debate regarding who was in the wrong), and today, another popular multi-service IM and calling client, Nimbuzz, had its Skype privileges revoked.

Skype certainly isn’t making itself any friends by blocking these clients. Both boast a large user pool. Nimbuzz is used by 30 million people, on Mac (s aapl), PC and all major mobile platforms. That’s a lot of people who are finding themselves seriously annoyed at having to look elsewhere for Skype support starting Oct. 31.

I’ve already said that Skype is missing the boat by not prioritizing its Mac and iOS clients above those for other platforms. Skype’s iPhone efforts are one of its major sources of revenue, but now, I think it may be on its way toward being squeezed out of the Apple ecosystem. Even if Apple doesn’t lock it out entirely, as it has done with Flash on iOS, it could render Skype redundant by expanding its FaceTime efforts. In fact, even the planned North Carolina data center could be part of an effort to prepare for increased server demand resulting from FaceTime. Nimbuzz already announced that it would be bringing FaceTime to its client, and it probably won’t be alone.

FaceTime’s arrival on the Mac as a standalone app from Apple also can’t be good for Skype’s prospects. If I can do phone-to-computer or vice versa between Apple-branded products using Apple-branded software, I’m not very likely to go looking elsewhere for a solution. And if Nimbuzz and other multi-service clients expand that capability beyond just Apple-made devices, then I’ll have an end-to-end video and voice calling solution that covers all the bases.

Apple probably won’t move to actively block Skype, but it will give preference to its own solutions first and foremost, like it’s beginning to do on the Mac by not shipping machines with Flash pre-installed in preparation for the arrival of the App Store on OS X. Skype may find itself on the outside looking in, especially if they continue to alienate third-party apps that could guarantee them a continued presence on Apple devices.

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16 Responses to “Is Skype Speeding Along its Own Demise?”

  1. Slightly off-topic, but since he mentioned it: what does Apple not pre-installing Flash player on a Mac have to do with Apple’s up-coming App Store on OS X? I do not see any relation at all.

  2. I think Skype is slowly digging itself its own ditch. Just the way the come off lately as being anti-cooperative is bad for their image. Not to mention the fact that they’re dragging their feet on a very lucrative market with iOS users. FaceTime has the potential to eat at some of its market-share, especially if it releases on Windows. I wouldn’t rule that out of the realm of possibilities.

  3. Seriously, does anyone on a blogging site actually do journalism, or do they just regurgitate everything company PR people tell them.

    Nimbuzz, 30 million active users? Are you friggin’ kidding me? They may have 30 million registrations over their lifetime, but anyone who knows anything about mobile knows that user retention is brutal. I’d be shocked if they have more than 3 million actives. Don’t think that cutting off Nimbuzz is a particularly large threat to Skype.

    That being said, it was probably a waste of Skype’s time. The rumor is that Nimbuzz is running out of money, and their investors are at the end of their patience cycle.

  4. Could you please cite the source that says “Skype’s iPhone efforts are one of its major sources of revenue”? I doubt this considering that there’s only 5 million iphone downloads and 500 million Skype users.

    Also I don’t see how FaceTime could render Skype redundant. FaceTime is a video calling application and Skype is a VoIP service. Skype’s revenue comes from SkypeOut and not video conferencing.

  5. I find all this speculation about the purpose of the datacenter (just like the speculation about the purpose of the PA Semi acquisition) a bit silly.

    You don’t need a big new datacenter to cope with “increased server demand” resulting from FaceTime. The audio and video is streamed directly from end user to end user and does not create any server load. Same with Skype. All that the servers do is manage online presence information and initiate the FaceTime session. That’s not more server load than running a simple instant messaging service. Sure, for a future extension like SkypeOut, you’d need more server power. But compared to what Apple is already handling, that’s not rocket science.

  6. IbearTouch

    I find Skype doesn’t speed along to do anything. I find them to be quite slow to react to what’s going on. I don’t know if you can call it meticulousness, or what, but Skype should get a grip before they get surpassed. Just my 0.02

  7. Skype’s folks know a hell of a lot more about global telecoms markets than most people, and certainly more than I do. But let me throw in a couple of ideas from the cheap seats.

    Skype looks like it is picking the wrong customers and distribution partners.

    To go after enterprise customers instead of building a really solid SMB telecom/presence suite seems nuts to me. There are a lot more SMB employees around, they adopt new services more quickly and they have fewer good options available to them than enterprise customers.

    Allying themselves with mobile carriers can’t end well. The carriers will just squeeze Skype while the handset OS publishers or other third parties build up momentum outside of Skype. I get the craven effort to kiss carrier butt when carriers can just block their traffic, but isn’t it a desperate short-term play?

    Facetime may be fine for people when both of their friends use Macs, but until Facetime is either opened up or it gains access to larger rivals it will be a fun add-on, not a serious communication service. Jobs must know this, so there should be fun surprises ahead here.

    As for Nimbuzz and Fring, it’s easy to see why Skype would kick them off. Even with a hobbled Android Skype on T-Mobile I’m reluctant to invest in an alternative when few of my friends or business contacts use anything but Skype. But Google’s a-comin’, and I’d guess that Skype won’t move quickly enough to save their skins.

    • “Facetime may be fine for people when both of their friends use Macs, but until Facetime is either opened up or it gains access to larger rivals it will be a fun add-on, not a serious communication service”
      Paul, Facetime was released by Apple as an open standard. Anyone is already free to use it — it is just a matter of time before Windows, Android, etc./ clients appear.

  8. Skype is surely confused and probably has been for a while..

    Fring beat Skype to launching a video calling application for the iPhone and that was one of the childish reasons for revoking Skype support. Skype was late to bring out an Android client and even after it did, the application has some missing features.

    I have been using Skype since the first publicly available beta but see myself using solutions like Fring, Line2 from Toktumi, Truphone more than Skype these days.

  9. I can tell you one thing, if it is Skype vs Facetime, Facetime will win all the time for many reasons. One of them is speed. Facetime is much faster then Skype. The second one is ease of use.

    But facetime has many things missing like calling landlines, text messages, text chat. But if its for video calling, the only reason you will use skype is if the other person does not have facetime.

    • Facetime is not gonna “win” anything over Skype, let alone all the many players in this segment. They will coexist and that is all. At the end of the day even 3rd party clients will not get Apple much past the semi-captive users on its hardware. And at the end of the day Apple only has 10% marketshare of PCs and probably same or less in phones.

      The fault here is with this author making this some duel between Apple and Skype when it fact apple-based customers have been probably a microscopic percentage of Skype customers….which is why Skype hasnt paid much attention to the platforms.