Skype Everywhere: Nokia and Skype Announce Ongoing Partnership

With the evolution of smartphones incorporating both WiFi and 3G wireless support, we are also seeing the application of Voice over IP technology as providing at least one leg of a wireless call.

• iSkoot was a pioneering example, with both their support of a wide range of wireless phones, including Nokia, Android and BlackBerry (full disclosure – I use iSkoot on my BlackBerry Bold) and their Skypephone so successfully launched on 3 services in nine countries.
• Recently we have seen the evolution of Skype Lite capable of providing access to Skype on over 100 Java-enabled mobile phones (not all smart phones), including Android.
• And Truphone has been launching services on Nokia, BlackBerry and, most recently, iPhone.

The real challenge for Skype was to get carrier adoption. Certainly the 3 Skypephone experience represents a successful business model where, as disclosed at eComm 2008, royalties associated with 3’s revenues are paid to both Skype and iSkoot. Skype announced at CES that they are developing carrier relationships in ten countries, including United States, that involve deployment of the Skype Lite client . With its new management team, including a former Motorola executive, it was only a matter of time before we would start to see deeper relationships with mobile device vendors.

And, of course, this initial device vendor relationship is with a vendor who has not exactly been a significant smartphone player in North American markets, although their market penetration has been more successful in European and Asian markets. Today, Skype and Nokia have announced a partnership where Skype will become deeply embedded into Nokia’s S60 Symbian platform with the launch device being the forthcoming Nokia N97. From the press release:

The Skype experience will be part of the address book of the Nokia N97, enabling presence – seeing when Skype contacts are online – as well as instant messaging. Nokia N97 owners around the world will also be able to use 3G and WLAN to easily make and receive free Skype-to-Skype voice calls, in addition to low-cost Skype calls to landlines and mobile devices.

The pros:

• Its support of both 3G and WiFi; this has certainly played well for Truphone adoption
• It supports the device at a platform level as evidenced by the integration with the native address book and the Nokia SIP stack. Is this a full VoIP client integration?
• The initial launch device has a QWERTY keyboard, making chat sessions on the device more viable and readily adopted
• An established smartphone vendor market leader outside of North America
• Probably a software licensing revenue generator for Skype
• Opportunity to drive (and share) SkypeOut calling revenue
• It provides free, beyond a monthly flat rate for the basic carrier service, voice and chat conversations with over 40 million Skype users worldwide

The cons:

• Nokia needs to establish North American smartphone market presence in a market dominated by iPhone and BlackBerry and where carriers largely control which devices and applications are available for use over their network
• Nokia needs to demonstrate they can provide a more user friendly smartphone user experience (a la iPhone) as opposed to simply being a handheld multimedia computer.
• Nokia needs to partner with carriers who are willing to allow open access to applications in their newly announced Ovi storefront

The questions:

• Has Nokia already signed up carriers to take on the (somewhat delayed) N97 when it launches in June? Following along with a Skype strategy announced at the CES press conference, we can probably assume that the device will first be available in non-carrier dominated markets.
• Does this represent an evolution of the Skype Lite client where chat and call setup occur over the network while the more robust and readily scalable voice channel carries the voice portion of a call?
• Where are the revenue opportunities for Skype, Nokia and the carriers?
• What is the ongoing relationship between Skype and iSkoot who pioneered this carrier adoption model? This Nokia-SKype partnership is totally independent of any iSkoot participation.
• How will the Nokia-Skype partnership compete with UMA plays such as described on the Tweet in the right?

Bottom Line: Liquid communications means turning on a device and finding Skype is “just there”. A partnership with the world’s largest vendor of mobile phones with hundreds of existing carrier relationships is not to be taken lightly. Combined with the Sony Ericssson Skype panel announcement yesterday, what hand will Skype play in working with Apple (iPhone) and RIM (BlackBerry)?

Update: Andy Abramson, VoIP Watch, attended the press conference:

Basically the underlying message the Skype CEO shared was carriers who will work with Skype will pick up users who spend more money than the non-Skype using mobile phone customer, or at least they did with 3.

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