Two years ago at CES 2010 Skype announced Skype for TV with two partners (Samsung and LG). It was only available on very high end Internet-enabled TV sets and required vendor-specific webcams. Effectively the cost of adoption was over $1,500. CES 2011 saw an expansion of the number of TV set vendors (Panasonic, Toshiba, Sony, Vizio) and the support of Skype for TV on BluRay DVD players from Panasonic and Sony, bringing the cost of adoption down to about $400 for the player and a supporting webcam.

One other complication was that all these offerings required a webcam that was specifically designed for the individual TV/player vendor. At a July 2011 panel discussion, Skype President Tony Bates mentioned that Skype for TV was installed into over 50 million TV sets; however, again these were mostly high end sets with a price point that did not encourage mass consumer adoption.

At CES 2012 there were some demonstrations and announcements that effectively make it possible to enable every television set to support a Skype for TV video or voice call at a much more reasonable cost:

• Tely Labs launched its TelyHD platform – an Android-based webcam that embeds HD video support of Skype for TV. Most significantly it is TV vendor-agnostic as it can work with any TV set that has an HDMI input. More on TelyHD to follow in an upcoming review. Total cost: $249.00 including webcam, available at the Skype Store.
• The newly announced Sony BDP-S790 BluRay player, available later this spring, is unique from a Skype perspective in that it will work with any webcam that supports Skype.

• Sony was also demonstrating a prototype of its forthcoming Android-based “Smart TV” set top box as its version of Google TV. It will deliver all the common Internet social networking applications such as Twitter, Facebook, YouTube and Skype, amongst others, to any TV set and again work with any webcam.
• Samsung announced its inTouch Android-based webcam supporting Skype and other social networking applications; deliveries to commence later this spring.
• All of these devices support not only HDMI and 720p HD video resolution but also an embedded WiFi internet connection.

Samsung was demonstrating Skype for TV where, as shown on the right, the webcam was embedded into the top frame of the television set. While apparently still supporting Skype for TV, there were no demonstrations in the Toshiba or LG booths.

Panasonic and Sony had new versions of their BluRay player, as well as new firmware supporting Skype for TV on their Viera and Bravia lines respectively. As shown in the video below, Panasonic’s firmware allows you to watch TV during a Skype call where you can switch the audio between Skype and the TV channel audio within the context of the conversation.

http://www.youtube.com/watch?v=ZQhj7za2uNk

A couple of the booth personnel mentioned that the one feature missing in a world where all TV vendors are actively encouraging 3D TV was the ability to adopt Skype for TV to 3D; apparently many of their other “smart TV” social networking applications somehow have the ability to “upscale” 2D to 3D. Not something I’m holding my breath waiting for, especially given what the webcam requirements would be.

Bottom line: The launch of products lowering the adoption cost of Skype for TV, especially on existing TV sets, significantly expands the potential user base of Skype for TV, not only for consumers but also for business use. The number one advantage is the ability to hold video calls where the other end point can be a PC, smartphone (iPhone, Android phone) or tablet – or another TV set that supports Skype for TV.

On the other hand, at the time of writing this post Skype for TV does not support Group Video Calling; in fact, currently one cannot even be a participant on a Group Video Call with Skype for TV.

While the webcams for Skype for TV are currently vendor-specific, it appears that the ability to use a generic Skype-certified webcam should appear later this year on the Sony devices. On the other hand TelyHD offers a complete solution in one hardware package.

Related articles

• Google TV’s biggest competitor looks awfully familiar (gigaom.com)

Last week I provided a review of my experience with a recent production model of the FREETALK® Connect•Me Adapter for Home Phone, initially available in the U.S. and Canada. To quickly recall its primary feature, the Connect•Me Adapter allows you to make PC-free Skype and SkypeOut calls and, optionally, landline calls from an existing home phone.

It turns out that adapting this product to other countries involves more than simply supporting another plug for the power connection. The landline telco industry backbones in each country also have variables that need to be addressed in order for the landline component of the FREETALK® Connect•Me Adapter for Home Phone to work properly in an individual country.

Effective today U.K. residents can “Skype from your Home Phone” with the launch of the FREETALK® Connect•Me Adapter for Home Phone U.K. edition. It’s available at the U.K. Skype Store, with options that include three month subscriptions for:

• up to 300 minutes** of international calls to landlines and mobiles, or
• unlimited* calls to landlines in the UK and Ireland and up to 300 minutes of international** calls to landlines and mobiles, or
• unlimited* international calls to landlines and mobiles in 41 countries***

It’s also available at Amazon U.K. and the eBuyNow UK store with similar options for Skype calling plans.

Of course Skype-to-Skype calls worldwide continue to be free.

For those U.K. residents who want a new dual mode PC-free phone (Skype and PSTN landline) a Philips VoIP855 cordless phone has also become available. This option allows you to include up to 200 of your Skype contacts in a phone book (and 100 names for landline numbers) as well as to make use of Skype’s presence feature. The previous GE Digital Cordless Expandable Telephone and RTX Dualphone 3088 are other options available.

Aside from the power adapter and firmware to support the U.K. landine PSTN, the discussion points in my previous review apply.

In conjunction with these product announcements Skype has issued a press release covering a survey they recently sponsored:

• No job too far – 50% of Brits say accepting a job abroad is easier with advances in communication technology

Note re the calling plan offerings:

*A fair usage policy applies. Excludes service, special, premium and non-geographic numbers. UK landline calls are those made to area codes beginning 01 and 02.
** The actual number of minutes may vary depending on your calling destination and the number of calls you make. A connection fee applies.
***Unlimited calls to landlines and mobiles in Canada, China, Guam, Hong Kong S.A.R., China, Puerto Rico, Singapore, Thailand, United States
Unlimited calls to landlines only in Argentina, Australia, Austria, Belgium, Chile, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, South Korea, Luxembourg,Malaysia, Netherlands, New Zealand, Norway, Poland, Portugal, Russia (Moscow and St.Petersburg only), Slovakia, Spain, Sweden, Switzerland, Taiwan, United Kingdom

While the FREETALK® Connect•Me Adapter for Home Phone became available in late August, I only received a production hardware version three weeks ago. I have now had a chance not only to verify the operation of all its features but also to observe some of the reviews.  But before talking about its operation I want to identify its market positioning as a result of my own experience and some of the review comments.

What is FREETALK® Connect•Me Adapter for Home Phone?

It’s essentially an ATA adapter that allows you to use a conventional 12-key TouchTone analog phone¹ to make calls to Skype Contacts and SkypeOut numbers over an Internet connection. Optionally you can continue to make calls over a landline.

Who is it for?

Anyone who wants to make Skype and SkypeOut calls without the need for a PC and already has a 12-key TouchTone phone. It is especially convenient for use with today’s very common cordless home phone setup comprising a base station and multiple handsets distributed around the house.

It offers a worldwide long distance service that combines free Skype-to-Skype calling with low cost SkypeOut calling to the PSTN. When combined with a local landline service it provides a unique complementary long distance service, especially if you are making international calls outside U.S./Canada.

Initially it is only available for use in U.S. and Canada; versions for European and other countries are anticipated to follow early in 2012. Update, Nov. 15, 2011: FREETALK® Connect•Me Adapter for Home Phone is now available in the U.K.

What is it not?

A complete replacement for a landline service. You still need a landline or alternative service for emergency e911 calling. Also the landline service will often include “free” local calling to a region identified by the carrier.

What are the requirements?

• A traditional 12-key TouchTone phone with its standard RJ-11 cable connection
• A broadband Internet connection (via a port on a router connected to your cable or DSL Internet service) accessed via a standard RJ-45 Ethernet cable connection
• An AC power connection (110-120 volt in US/Canada)
• For configuration and setup only: a Windows or Mac PC
• Optional: a traditional PSTN landline service with RJ-11 cable connection

Why would you buy it?

• To place free Skype-to-Skype voice calls to any destination worldwide from the world’s most familiar telephony user interface
  • the call can be received on any Skype-enabled platform: PC, smartphone, iPad, TV or even another Home Phone with Connect•Me.
• To take advantage of Skype’s low worldwide international calling rates and calling plan subscriptions for calls to the legacy PSTN or mobile phones in over 180 countries.

So what has been the experience?

While most of my calling involves using Skype on PC’s or a wireless service on a mobile smartphone I have maintained one line of a legacy PSTN service from Bell Canada, mostly for local calls and as a matter of convenience.  I also have a long time investment in this phone number as my primary business number. (My fax line has been replaced by PamFax; a second voice line became redundant a few years ago.)

A couple of years ago I reviewed this setup with Bell Canada where I wanted a minimal long distance capability while maintaining the ability to make local calls. Just having access to a reduced long distance charge was costing me $11.00 per month before making any calls. I seldom made long distance calls on that line but needed it for emergency circumstances such as when my smartphone batteries had died or my Internet connection was down. It was also a convenience when placing local calls from its physical location.

I have replaced the Bell Canada long distance service with the Connect•Me Adapter with the following consequences:

• I can make Skype-to-Skype calls worldwide at no cost
• I can make SkypeOut calls at 2.3 cents/minute vs Bell Canada’s charge of 10 cents/minute
  • I have the option to use a Skype Calling Plan subscription, if call volume suffices
• I have eliminated the $11.00 per month fixed charge from my Bell Canada bill.
• I make “local” calls over the landline at no additional charge beyond the monthly service charge.
• I continue to have access to Bell’s auxiliary services such as call forwarding, call waiting and basic voice mail.
• TouchTones (DTMF signals) are passed through successfully for services that require, say, dialing into a business extension or placing a prescription order with a drug store.

But here are the caveats:

• I need to start landline calls using the # key followed by the normal 10-digits for local calls.
• I can start SkypeOut calls by dialling ** followed by [country_code] [area_code] [local_number]
• I can access up to 100 speed dial numbers for both Skype and SkypeOut calls
• I have set up a separate Skype account with only 30 to 50 contacts. This becomes an essential consideration if you are using this service for personal or family calls and your normal Skype account is used heavily for business. Note that the Connect•Me Adapter can handle up to 200 contacts.
• Due to my low SkypeOut call volume on this phone line I am using Skype credit for SkypeOut calls; however, one can use a Skype Calling Plan to call U.S./Canada at $2.95 per month or over 40 countries worldwide at $13.95 per month subject to Skype’s fair usage policy.
• And to repeat (from the user portal):

• If you have a landline connected, dial #911 for e911 service.

And how is the voice quality?

Calls using the landline have the same quality as a normal narrowband landline call. (When placing a landline call you’ll hear some exotic noises while placing the call but the connected call allows me to carry on a normal phone conversation with no audible distractions.)

When making a SkypeOut call to the same number I have observed noticeably clearer voice quality compared to using the landline . And on Skype-to-Skype calls there is excellent voice quality.

By making a call to my primary Skype account on a Windows PC I was able to check the Call Technical information which reported a “NWC” codec with 16KHz sampling. This confirms that, where feasible, the Connect•Me Adapter supports wideband audio. I am told that NWC is actually a dynamic codec that will switch between narrow band audio G.729 and wideband audio G.722 codecs as appropriate to the connection conditions. But the bottom line has been a much crisper audio on a SkypeOut call than experienced on the landline.

How does the Connect•Me Adapter get set up?

The Connect•Me Adapter is accompanied by a user portal for setting up:

• Call Settings –
  • Do you want to have local calls default to the landline or SkypeOut?
  • Do you want international calls to default through SkypeOut?
• Call Forwarding and Voicemail –
  • calls to your Connect•Me-enabled home phone can be forwarded to, say, your mobile phone or any other landline number; the delay before forwarding can also be set.
  • if call forwarding is not set up you can set up and use Skype voicemail. If both are setup call forwarding takes priority.
• Contacts and Speed Dials –
  • Add Skype Contacts to your account, set up speed dials for making Skype-to-Skype calls and SkypeOut calls.
  • There is an option to print out your speed dial list.

Firmware Upgrades: From time-to-time FREETALK will issue upgrades to the firmware to offer new features and/or bug fixes. The first upgrade added support for Skype voicemail. These upgrades are provided automatically with no user intervention required. There is an option in System Settings to define a time-of-day for accepting upgrades, such that upgrades will not interfere will normal calling times.

Update: as I was finalizing this post I lost power at my office location. When power was restored about 30 minutes later, the Connect•Me Adapter came back up within a couple of minutes; I was able to make both Skype and landline calls with no user intervention.

Bottom line: The FREETALK® Connect•Me Adapter for Home Phone provides an option for taking advantage of Skype’s services for voice calls using a standard 12-key TouchTone phone set. It can either be a stand alone service for long distance calling, with the caveat that it does not support e911 emergency calling, or an international long distance service complement to a “local” landline service.

When attached to a DECT cordless phone base station, it will Skype-enable all the handsets around the home.

Initially the FREETALK® Connect•Me Adapter for Home Phone is only available for use in U.S. and Canada via either the Skype Store or the Amazon U.S. and Canada stores (search for FREETALK under Electronics). There are three SkypeOut options:

• 60 minutes of SkypeOut calling as the starter package
• a one year North American (US/Canada only) Calling Plan subscription, or
• a 3 month worldwide Calling Plan subscription to over 40 countries

Individuals need to make their own assessments of the savings they will achieve by using the  Connect•Me Adapter. In particular “local” landline services and calling plans will vary by carrier. The information presented here is for one particular circumstance using the author’s landline carrier.

Should you wish to make PC free calling but require a phone handset, the GE Digital Cordless phone offers a more complete Skype experience as it can embed your Skype Contacts and provide presence information.

Full disclosure; the author was a participant in late beta testing for this product using a pre-production version of the device; however, he has received no compensation for his evaluation and feedback. There are no affiliate links in this post; if one clicks on the link to PamFax, there are affiliate links on that page.

¹ It will work with any single line phone, including cordless phones, except older cordless phones where the cordless connection works over the same 2.4GHz band as WiFi. Also, run legacy Nortel phones with a power adapter in its “backup” mode using power from the phone line – i.e. – without the power adapter.

Related articles

• Now you can use your home phone for Skype calls (gigaom.com)
• New Freetalk adapter makes Skype more like MagicJack (skypejournal.com)

Three months ago Skype and TELUS announced an agreement whereby TELUS Mobility, a Canadian carrier, would become proactive in supporting Skype through several initiatives:

• Providing full platform and customer support for the use of Skype on iPhones and Android phones
• Offering a Skype edition LG Optimus Black phone powered by Android with a pre-installed Skype client, support for Bluetooth connectivity and 60 minutes of SkypeOut calling
• Purchase of Skype credit in $5, $10 and $20 amounts charged to the customer’s TELUS account
• Offering Skype with TELUS’ Data Flex Plan whereby data charges are automatically incremented with increased usage. For instance, using <500MB in one month will cost $35 but using 1MB to 2MB in the subsequent month would cost $55.

Late last week I received promotional emails from Skype (in fact, one email for every Skype account registered in my name) that would appear to be going to Skype’s Canadian users. This is the first indication that TELUS is now executing on their agreement with Skype.

On scanning the TELUS Mobility website:

• Skype is proactively being promoted on any iPhone with iOS 4.0 and any Android phone with at least Android 2.1
• Skype credit can be purchased either from a telusmobility.com web page or via a text message that delivers the link for purchase.
• Skype effectively becomes the recommended international long distance service for any of the supported phones
• TELUS is deploying Skype on their 4G network with 21Mbps speeds, being upgraded in many locations to 42Mbps and LTE over the next few months. However, they expect users to see download speeds of 4-6 Mbps in practice.
• Skype is also being heavily promoted on their recently released Samsung Galaxy S Fascinate 4G running under Android 2.3. A $29.99 purchase price requires a minimum $50/month voice and data plan.

The one cautionary note is battery life. As mentioned in a previous post covering Skype for Android,  when running Skype, battery life can be shortened to as little as 3 to 4 hours. This is reinforced on some otherwise very favourable TELUS user comments on the Samsung Galaxy S phone (click on the Reviews tab):

It does have a good battery life, as long as you are closing your apps and other programs properly. Leave stuff open, watch too much video, use the camera, and other battery-draining apps, and yes you will run your battery dry in 1/2 a day. Use it in moderation, along with your casual texting and communication tasks and you will be fine for a day’s worth.

The combination of a 4G Samsung Galaxy S Android phone with Android 2.3 should be sufficient for making Skype video calls on the Fascinate 4G. However, as TELUS is effectively pre-installing a Skype client on these phones, they need to complete some testing and Android software upgrades before confirming that video calling works. In the meantime, if you are able to have a video call experience with either of these phones, please enter a Comment below. TELUS did inform me that video calling will work with the forthcoming 4G Samsung Galaxy S II X .

Skype’s support by TELUS is different from its previous offerings with Verizon in that TELUS is supporting a full Skype for Android peer-to-peer Skype client delivering Instant Messaging, participation in Skype multi-party calls and mood message – and it works over an LTE network. Based on other Skype for Android features it should include native address book integration; as discussed above it certainly has the potential to work with Skype video calling.

The initial Verizon service is a voice and Instant messaging service over a 3G network with no potential for video calling due to its underlying calling architecture which also requires gateway server overhead. On the other hand Verizon did announce plans, at CES, for offering new Android phones that would run Skype, including video calling, on their forthcoming LTE network. (But Andy Abramson seems to be having difficulty with video calling of any kind specifically on Verizon.)

Bottom line: TELUS is now offering full support of Skype on iOS devices and designated Android phones, where the latter is providing customers with a seamless path to both acquiring and sustaining Skype services. Provided they have an appropriate data plan users can make free voice (and video?) calls worldwide to their Skype contacts and low cost international calls to landlines and mobile phones worldwide.

For Skype it becomes another contribution to SkypeOut revenues; there is no mention of any royalty arrangements when it comes to revenues generated associated with the purchase of Skype-enabled Android phones. TELUS, as Canada’s third wireless carrier in subscriber base, demonstrates its aggressiveness once again through a unique offering in the Canadian market. While making it available to their existing customer base, time will tell if Skype support becomes a primary reason for adopting Skype; I have yet to see any TELUS advertising promoting  Skype.

Related articles

• Skype joins forces with TELUS to bring affordable international calling rates to customers in Canada (blogs.skype.com)
• Skype 2.1 for Android enables video on majority of Android devices (blogs.skype.com)

Just over a year after Skype’s first announcement of SkypeKit as a closed beta program for third party developers, Jonathan Christensen, Skype’s Vice President, Emerging Opportunities, announced the opening up of the SkypeKit developer program to a public beta at eComm 2011 this afternoon.

Yesterday I had the opportunity to discuss the program with Chris Andrews, Sr. Business Development Manager at Skype. The primary function of SkypeKit is to provide access to a “headless” version of Skype from which developers can provide their Skype functionality through their own product’s user interface. Otherwise SkypeKit provides access to the same functionality as standard desktop clients; however, it does not support screen sharing or multi-party video (Group Video).

To join the SkypeKit developer program developers create a developer account and pay a one-time fee of $10 to download the SDK and participate in the developer community forum. With its ability to support embedded Skype in hardware, hardware partners will also need to obtain Skype certification at the standard costs for that program. Software application developers have no additional cost. At this point there is no revenue sharing expected by Skype; that’s the one issue that will have to be addressed at some point if Skype is to demonstrate ROI to Microsoft.

Chris confirmed access to the video stream is available via Skype’s proprietary RTP interface which has been designed to address the various screen formats developers will encounter with either their own hardware or, in the case of a software application, the various PC and other intelligent device displays. Documentation is available at the Skype Developer site.

While SkypeKit provides support for both hardware and software, most of the development to date has centred around hardware devices. At CES Skype announced that SkypeKit was being used for a baby monitor based on the Panda chip and is being tested for incorporation into GM’s OnStar service. One new player he mentioned is Tely Labs, a startup with no website, who are developing a “living room experience” for their own branded TV accessory; we’ll have to wait to see what this means beyond the various Skype for TV/BluRay offerings.

An initial software platform incorporating SkyepKit is Imvox, a social voice communications platform for gamers. From their website:

The biggest benefit of Imvox’s participation in the SkypeKit developer program is it allows us to offer the gaming community crystal clear voice quality, which is used by hundreds of millions of people across the world every day. The Skype partnership also enables Imvox to work cross-platform, so Windows and Mac users enjoy the same high-quality audio. It’s about time a solution works for everybody in the gaming market.

I had an opportunity to experience Skype’s SILK codec in a gaming platform a year ago November with the launch of the Blabbelon “click-to-talk” voice service for gamers. It’s a different market space from the traditional consumer and business voice conferencing.

Long time Skype partner InnerPass has been awaiting the launch of SkypeKit’s open beta to incorporate Skype into their newly launched Group Mix team collaboration service – an evolution of their previous InnerPass Meeting and Sharing service that was offered as a Skype Extra.

The SkypeKit Developer Site provides documentation and samples to assist with the development process covering topics such as TV, audio and video and various development tools. However, Chris did mention that, while all the tools are there to support software development, they still need some work to make a software developer totally comfortable with using SkypeKit.

Bottom line: With Skype’s pending acquisition by Microsoft it will be interesting to see what uptake there is from developers and how this developer program works in conjunction with other Microsoft developer programs. Certainly Microsoft brings the financial heft and experience required to establish and attract a large developer community for SkypeKit as it evolves.

According to Stacey Higginbotham’s GigaOm discussion with Jonathan Christensen there are 2,000 developers who have been part of the closed program but there are over 10,000 developers who have applied and can now participate. As with the iPad and smartphone market spaces the evolution of the real time communications space will really depend on how readily users will adopt the resulting applications. Until other services can offer a combination of high quality voice, the ability to call a wide range of devices and platforms, HD video and over 170 million active users, Skype certainly starts out with an initial performance lead over pending competitors.

Skype Journal: Skype for iPad; SkypeKit launching at eComm next week?

Related articles

• Whither Skype Extras Today? Withered? (voiceontheweb.biz)
• The future of Skype Extras (blogs.skype.com)
• Skype for TV – Not on Windows (voiceontheweb.biz)
• With SkypeKit, Skype wants to be everywhere (gigaom.com)

While attending CES 2011 back in January, I spent an afternoon visiting the main television vendor floor where 3D TV was definitely the number one topic of interest; however, I found, and reported on, several vendors with display kiosks demonstrating Skype for TV.

Michael Wolf, at GigaOm’s NewTeeVee, recently brought renewed visibility to the Skype for TV initiative in his post: Could Skype Be Microsoft’s Smart TV Trojan Horse?.   Frankly, from my learnings that afternoon,  his view about a role for a Windows OS on TV’s is baseless; it pays to look at the hierarchy for enabling Internet services on the TV’s.

One common trend I observed in visiting these booths is that all the vendors have embedded as firmware a complete Internet-enabling smart platform that provides access to various “cloud” applications. Social networking services such as Facebook and Twitter are the most obvious. Amongst other applications are several involving movies, such as Netflix, and sports offerings, such as NHL and ESPN Sports Center.

Skype, of course, was on at least six vendor offerings, using its SkypeKit platform, initially available for the Linux OS. In fact, Panasonic includes a dedicated Skype button on the remote controller for their Skype-enabled TV’s and BluRay players.

Behind all this I learned how the TV vendors are embedding these platforms. It’s a case of having the platform software embedded into the TV’s firmware and hardware, then layering the applications on top of the platform. Given that SkypeKit is behind Skype for TV it appears that they are using a Linux-based operating system. Certainly there is no room, given the current state of these offerings and time frames involved, for an embedded Windows.

On the other hand Skype for TV will bring to Microsoft exposure to experience with integrating applications onto these platforms. Windows Live services would be an obvious candidate for integration into these TV platforms. After all we do have Windows Live Messenger access on various smartphone platforms such as BlackBerry and iOS4.

And one should never lose sight of the network effect. Skype for TV video calls can be made to over 170 million active users who may be on any of several platforms – PC’s, iPhones, Android phones. One of my first benchmarks for how Microsoft will deal with its Skype acquisition would be the introduction of a unique Skype for iPad. This would be an application that would allow video calling on the iPad 2 taking full advantage of the iPad 2’s display size. It has nothing to do with Windows or Office but rather providing new user experiences using resources at hand.

Bottom line: It’s not a case of will Microsoft attempt to displace other OS’s on TV platforms with a derivative of Windows – that opportunity has passed them by. But rather the strategic opportunity lies in merging Skype’s experience with introducing a real time communications application onto TV platforms with Microsoft’s existing Windows Live experience on other platforms.

Michael also questions whether Google TV will be a competitor. In the end consumers want as few boxes as possible combined with ease of operation. If all the services, broadcast TV and Internet applications can come via one “box” the market for add-on boxes on home entertainment systems will eventually evaporate. How many HDMI connections will be tolerated by the average consumer?

Related articles

• Microsoft Acquires Skype – The “Amber Mac Test” (voiceontheweb.biz)
• Microsoft Acquires Skype – A Most Interesting Marriage (voiceontheweb.biz)
• The End of the “Skype as Bandit” Era (disruptivetelephony.com)

With today’s announcement of Microsoft’s intention to acquire Skype, subject to regulatory approvals, Skype has received the endorsement required to be considered a long term, viable and stable service addressing both consumer and enterprise markets.

From the press conference and press release:

• Skype will continue as a brand and an independent business unit within Microsoft. There is significant value when your brand name has become a verb in the English language (and one that translates readily to all other languages).
• Skype will continue to support “Skype Everywhere” on Mac’s, Linux, iPhones/iPads, Android phones, TV and other devices – a key requirement to maintaining and growing its current base of over 170 million active users. (This was one condition of closing the deal but execution is key; the first test will be the revamp of the Skype for Mac 5 user interface.)
• Skype has a strong basic revenue generating business; at this point it should be profitable but certainly has had good EBIDTA.
• Skype now has 170 million active users (in the past quarter), as many as 30 million online concurrently at its daily peak and growing the accounts at a rate of over 600,000 per day.
• Outlook is a key initial application for integration into current Microsoft products; Microsoft Lync will be taking advantage of Skype’s underlying technology where appropriate and feasible.

My initial thoughts:

• Keep in mind that Microsoft has bought a communications software company; one of the biggest challenges will be the integration of the software development activities across what has to be at least two different product management and software development cultures.
• Microsoft brings to the table a new level of business process and product management expertise from which Skype will benefit significantly.
• Only Microsoft has the resources – technical, product and business – that can be leveraged to justify an $8.5B buyout price (and give the current investors ~150% return on their investment over 18 months). With opportunities to enhance Office products, add technology to Microsoft Lync and complement other collaboration product such as the Sharepoint platform, they can readily get their investment back within a few years.
• Skype has found a permanent home.
• Skype can now focus totally on product and service development without the distraction of seeking financing (and the associated endorsement).

Some questions:

• How will the two companies’ instant messaging services be brought together? Skype chat offers a richer chat experience, especially given the ability to rapidly escalate to a superior voice and video conversation and to provide complements such as file transfer.
• What will happen to the Skype Store and associated hardware? While Skype has supported and sold products from several hardware vendors, Microsoft’s limited hardware offering (of mice and keyboards) is sold via traditional PC hardware retail distribution channels. Yet much of the hardware has been designed, with assistance from the Skype-certified program, to take full advantage of Skype’s inherent technology.
• Skype has been attempting  to address the large enterprise market with its Skype Connect program; yet we have heard of no successes. Microsoft Lync is a large enterprise product that can probably take advantage of Skype’s inherent technology while delivering an offering that meets the concerns of enterprise communications managers. However, what will Skype be doing to support the small to medium business market – where over 35% of its users say they are using Skype in business?
• What impact will the time required to deal with regulatory issues be on the development and launch of upgrades and new products ? We were told at the press conference no road map will become available until these regulatory issues have been addressed such that the acquisition can be completed. Yet innovation, business development and product releases must continue during this period.
• What direction will the developer program take? Will Skykit survive its rather long birthing process or can Microsoft bring in developer program expertise that would finally get Skype an active developer program from which we can see results? (and from which third party developers can benefit.)
• Can we still expect to see evolution of the Facebook relationship in some way that supports real time conversations via Facebook?
• Since Steve Ballmer showed up on stage at RIM’s BlackBerry World event last week and is now deeply associated with Skype, can we expect to see a carrier-agnostic Skype client on BlackBerry devices? Or would that be too much conflict with Windows Phone?

Bottom line: while there have been overlapping products (such as Live Messenger and Skype Chat) there is so much synergy here that it’s going to be interesting to see what product evolution occurs over the next year and how Microsoft integrates an acquisition with what has become a brand onto itself. Steve Ballmer can be thankful that there was no Yahoo acquisition and that the Skype opportunity has come about with so many more obvious benefits.

One other benefit for Canadians: the Canada Pension Plan Investment Board cleared about $500MM on the deal above their initial $300MM investment 18 months ago.

Other thoughts:

• Dan York: The End of the “Skype as Bandit” Era where Dan provides an interesting  commentary on the barriers Skype has overcome, the Skype experience and the people behind Skype. Dan has blogged more about Skype than any other topic; his employer, Voxeo, lives and dies by Skype, especially the Skype chat.
• Alec Saunders: Does Microsoft’s acquisition of Skype change anything? where he talks about the impact on carrier relationships, video calling and handset manufacturers.
• Alec Saunders: Why is Steve Ballmer excited about Skype? where he provides an excellent overview of today’s Microsoft-Skype press conference and his conclusions as to why this is an excellent deal. (Recall Alec worked for several years at Microsoft.)
• Tidbits, Apple News for the Rest of Us: Microsoft to Buy Skype for $8.5 Billion “… Microsoft says it will continue to invest in and support Skype clients for non-Microsoft platforms. If Microsoft really loves us, they’ll throw out the Skype 5 interface as an initial gesture of goodwill.”
• Phil Wolff, Skype Journal: What Skype’s partners can expect from the deal and Why did Microsoft buy Skype?
• GigaOm: Steve Ballmer & Tony Bates Talk About Skype-Microsoft …

Related articles

• Done Deal: Microsoft to Buy Skype for $8.5 Billion in Cash (kara.allthingsd.com)
• Microsoft to Acquire Skype (online.wsj.com)
• Microsoft targets video-calling with Skype (theglobeandmail.com)
• Microsoft’s Plans for an Office-Flavored Skype (blogs.wsj.com)
• It’s official: Microsoft to buy Skype for $8.5 billion (seattlepi.com)
• Why Microsoft Plus Skype Is An Enterprising Idea (informationweek.com)
• Microsoft Brings Skype from Living Room to Board Room (pcworld.com)

Ever wonder if Skype could replace your home phone line? Borderless Communicator publisher and independent Skype “statistician” Hudson Barton has outlined, with encouragement by Skype Journal‘s Phil Wolff, the complete details of how he has deployed Skype to become his home phone.

If you are considering this option here are some of the considerations:

• Skype Online should be offering numbers in your local calling area.
• Create a separate Skype account solely for the home phone configuration
  • There are no Contacts associated with the account (optionally you can create a separate set of contacts)
  • All inbound calls are concurrently forwarded to their two  iPhones (leaving one more PSTN call forwarding number available)
  • They still use their original Skype accounts for making and receiving Skype calls with their Skype Contacts

• Hudson and his wife answer ALL calls on their respective iPhones using the carrier’s voice channel
  • not on Skype for iPhone
• They also subscribed to a North American unlimited US and Canada Skype Calling Plan
  • $60 per year (vs $360 for a Time Warner home phone line)
  • Results in a 50% discount on the cost of their Skype Online number (net $30 per year)
  • Required since all inbound calls are forwarded to their iPhones on the PSTN
  • Provides outbound calling options (see below)
• Hudson has outlined the issues with respect to outbound calling.
  • Where a SkypeOut call would be the lowest cost, he uses Skype for iPhone logged into the same “home phone” Skype account.
  • However, due to battery issues he closes Skype for iPhone when not making Outbound calls. (recall that they answer inbound calls on their wireless carrier’s voice channel).
  • For outbound calls he can optionally set either his Skype Online number or a mobile number as the callerID for SkypeOut calls.
• There is no 911 service for the Skype Online number; however, it is provided by their iPhone carrier.
• Voice mails are left on the iPhones’ carrier accounts for ready access, not Skype voice mail.

With Hudson’s implementation, the Skype client is never open except when required on the iPhone for SkypeOut calls; Skype’s infrastructure works in the background to forward calls. No PC is required once the account is set up and call forwarding configured. Other than the mobile phones, no PC hardware is required for the ongoing use of the service.

Over the years I have experienced a couple of other situations where, while it may not be their only home phone service, users have taken advantage of Skype.

Use a PC-free Skype-enhanced phone. While there were once several offerings for this, the current offerings are the RTX Dualphone 3088 (cordless, landline and Skype) which can combine a landline service and Skype into one platform and the FREETALK Office Phone (Ethernet, Skype only) . Since the Dualphone works via a DECT-supported base station, you can have as many as four handsets around the home. Once again:

• create a separate Skype account for your “home phone” service
• ensure that you can obtain a Skype Online number that is toll-free to most of your callers
  • low cost unlimited calling US/Canada landline subscriptions are very common
• you have configured call forwarding options to send unanswered calls to a mobile phone
• obtain a Skype subscription appropriate to where you expect to place outbound calls
• 911 calls can be made via the landline or the user’s mobile phone.

In one instance the user is moving amongst several countries over a few months and they simply take their Dualphone with them and obtain a local landline service if needed.

My own home phone is a Dualphone equivalent; but our landline uses the Rogers Home Phone service where the plan includes 1,000 minutes of US/Canada calling and free calls to other Rogers Home Phone customers as well as any Rogers wireless phone in Canada. But a similar Skype configuration is not feasible in Canada as Skype Online numbers are not offered for Canada.

Bottom line: Yes, with the appropriate services available in your local calling area, you can replace your home phone with a Skype service. However, understand you will need a smartphone for 911 calling and you need to ensure your iPhone is kept charged to be able to receive calls.

Other posts:

• RTX Dualphone 3088: The Bloggers’ Have Their Say
• RTX 3088 Dualphone: An Ideal Home or Small Office Solution for Easy Worldwide Calling

Related articles

• Skype hits 145 million users monthly (voiceontheweb.biz)

Note: While eBuyNow (formerly In Store Solutions and producer of the FREETALK Office Phone) was a client of the author’s, this is no longer the case. The author currently has no interest in any product sales resulting from links within this post. He has been using the no longer available Phillips dual mode cordless phone for his Rogers Home Phone service.

This morning, at the CEA Line Show in New York, Skype is taking the first step in the evolution of its revamped developer platform with the beta release of SkypeKit, “empowering consumer electronic and desktop software innovators to embed Skype into their products”.

In summary:

• Most importantly, SkypeKit allows developers to embed all the functionality of Skype into their offering without the need for the end user to have the Skype client open. They call it a “Headless” Skype toolkit whereas the developer community had been using the term “Naked” Skype.
• Initially SkypeKit is available as an invitation-only beta.
• Today API’s are available for Linux; API’s for Windows and Mac OS/X will be available in three to four weeks.
• The current program is targeted to consumer electronics and other telephony device manufacturers as well as desktop software developers
• SkypeKit includes support for Skype’s royalty-free ultrawideband audio SILK codec.
• SkypeKit supports Skype functionality beyond simply voice, including Skype video and H.264 processors embedded within hardware (such as with the FREETALK Everyman webcam).
• Skype’s developers have put significant effort into both security and scalability to sustain two of Skype’s key features.
• Skype will be promoting SkypeKit developers offerings through a “plugged into Skype” logo as well as making them available via the Skype Store.
• SkypeKit provides a long requested complement to the legacy Skype Public API’s used in applications such as Pamela, VodBurner, OnState, InnerPass and others.

This morning I had the opportunity to discuss the SkypeKit beta launch with Jonathan Christensen, Skype’s General Manager and Head of Platform. It provided an opportunity to dig deeper into Skype’s goals and strategy for the SkypeKit platform.

Primary goals of SkypeKit are:

• To provide developers with a “naked” Skype such that a Skype client is not necessary for the deployment of Skype on a hardware platform or Skype-enhanced application
• To provide an SDK that supports ALL the functionality of the current Skype clients, including video and SILK.
• To promote the incorporation of SILK into end point devices, making possible high quality audio calling such as experienced with the recent release of Skype for iPhone 2.0.
• Make the adoption of Skype into a device or application as friendly and readily adaptable as possible while providing appropriate levels of security and scalability
• To provide developers with a robust, scalable and proven channel for readily marketing their devices and applications worldwide.

In our discussion Christensen pointed out that Skype had not only reviewed developer requests for a revitalized and enhanced SDK but also incorporated the need to support all Skype functionality as well as maintaining the level of security and scalability required to meet the demand levels of Skype’s user base.

Christensen emphasized that Skype will be aggressively pursuing hardware vendors to license and adopt SILK as a standard feature of their offerings and to effect interoperability for Skype. IP-phones such as those offered by Linksys, Aastra, Polycom, snom and Grandstream would certainly be good candidates; their adoption of SILK would contribute significantly to Skype’s efforts to make SILK a standard. But it also means we could see the incorporation of SILK into, for example, the Skype for TV offerings available for certain models of Panasonic, LG and Samsung TV sets.

On another topic, Christensen emphasized Skype’s intention to facilitate marketing of the resulting offerings through both Skype’s “plugged into Skype” designation and the option to have them carried on the Skype Store. While any vendor can develop and market an offering on their own, it only receives the “plugged into Skype” designation required to be offered on the Skype Store  by meeting two conditions:

• it was developed using SkypeKit
• it meets Skype Certification standards when it comes to establishing a baseline for audio and video quality

Finally he pointed out that Skype launched this new SDK platform effort with this approach because “having an SDK for devices and desktop applications are a natural place for us to start extending Skype capabilities today”. As for supporting web developers, Skype only said, “We know there is demand among web developers, but we have nothing to announce at this time.”

To give a sense of developers intending to use SkypeKit, FREETALK (with their Webcam for Samsung TV), Panasonic, Litl with their Webbook and Grandstream are participating in the Skype booth at the CEA Line Show this week.

Bottom line: There’s quite a collection of legacy Skype hardware collected around my office over the past four years; most of it is no longer available due to  lack of ongoing support by previous Skype management, technology changes and vendor disappearance (who recalls US Robotics, for instance?). Frankly, if we look at Skype Certified hardware available on the Skype Store today, we only see offerings from FREETALK, Logitech, FaceVsion, RTX and some speakerphone vendors, such as Yamaha and ClearOne.

SkypeKit represents Skype’s first step in rebooting and revitalizing its hardware device support; it certainly fits in with Skype’s “Skype Everywhere” strategy. Last week at CommunicAsia, Skype CEO Josh Silverman was talking about his vision of “fixed-mobile convergence” for Skype where a user can transparently move from device to device and seamlessly continue a conversation without the need to even log on from one device to the next. But the final proof is in the execution:

• Has Skype made the business and ongoing support case for developers to employ SkypeKit and deploy offerings?
• Will SILK become an industry standard for audio quality? and will IP-phone vendors realize the value of SILK?

As for other Questions and Answers, check out that section at the end of Jonathan’s post today.

Full disclosure: In Store Solutions, producer of the FREETALK line of Skype hardware, has become a client of Denali InterConneXions, publisher of Voice On The Web, building on the author’s previous business development experience with establishing partnerships that can assist with the promotion of a primary vendor’s offerings. A more complete statement will follow shortly.

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With the release of Skype 4.0 for Windows beta 3 a year ago February, Skype first introduced their superwideband SILK codec. A month later at eComm 2009, Jonathan Christensen announced SILK’s availability for third party partners with royalty free licensing of the SILK codec. Since then it has been incorporated into all subsequent releases of Skype for Windows 4.x, Skype for Mac 2.8 and Skype for Linux. Recently Skype announced that the SILK codec will be supported in the next release of Skype for iPhone.

What does the SILK bring? Basically the best quality “in-your-head” audio available for voice conversations. To recall Jonathan Christensen’s highlights at the time the SILK codec was first introduced, the focus was on:

improving the audio bandwidth out to 12,000 Hz (12KHz)

providing bandwidth management to deal in real time with degraded  network conditions

balancing the codec optimization between voice, music and background noise, each of which can have an impact on the overall user experience

overall robustness to provide a more consistent user experience, regardless of network conditions and an individual caller’s voice signature.

From a user perspective, one will notice crisper conversations, easier interpretation of accents and an overall high quality “in-your-head” voice experience.

But there have been other consequences of SILK’s availability:

• The FREETALK Everyman Headset for Skype ensures that users get the full benefit of SILK by providing an audio chip that effectively replaces the PC’s native audio chip to bring consistently the full benefits of the audio quality available with SILK.
• Similarly the more recently introduced FREETALK Freedom Wireless Stereo Headset also supports SILK’s audio bandwidth.
• A push-to-talk offering, Blabbelon, which provides the ability for gamers to communicate in a multi-party voice algorithm used by gamers, has incorporated the SILK codec, setting a new standard for gaming voice sessions.

But here’s the bigger picture: in order to have a voice conversation that takes full advantage of SILK, the end points of the conversation must incorporate the SILK codec and the telecom infrastructure must support the transmission of SILK conversations.

• The three Skype clients make this possible for end-to-end Skype-to-Skype calls between PC’s (and iPhones with the next Skype for iPhone release);
• Invoking SILK in Blabbelon by default results in every call participant’s taking full advantage of SILK since it is incorporated into the SILK client.

Incorporation into Skype for iPhone will only take advantage of SILK should the other party also be on a Skype client. But:

• SILK is not currently supported in the recently released Skype for Symbian.
• Nor will it be used in the Skype clients being developed for use by Verizon customers due to the need to link the user’s smartphone to Verizon’s Skype gateway using the underlying 3G wireless voice channel.
• SILK cannot be invoked on SkypeOut calls to the PSTN.
• Nor is it supported yet on any other third party smartphone or other end point handset or phoneset hardware.

And therein lies the challenge: how does one propagate SILK such that it becomes available beyond the Skype and Blabbelon worlds? Skype has taken the first step by making the SILK codec available royalty-free and publishing the source code. However, for broadest adoption it needs to become a recognized international standard.

Recently Skype has been working with the IETF’s “CODEC Working Group” as one candidate to be considered in the working group’s effort to identify and standardize a superwideband audio codec that could be widely used across IP-based conversations. In a “Speaking of Standards” post earlier today, Skype releases source code for SILK super wideband audio codec – the details…, Voxeo’s Dan York has provided an excellent detailed background, including both the political and technical considerations leading up to the adoption of such a codec as an IETF standard for interoperability across service providers and end point software and hardware suppliers. He concludes with:

Still to be seen is if there are any additional licensing terms from Skype, but overall this is a great step forward for those of us who want to see better overall audio quality on the Internet. Obviously it’s in Skype’s interest to do this so that the CODEC WG might consider SILK as the codec to standardize on versus the others or creating a new one… but still… it’s great to see. What do you all think?

And it sure helps Skype’s case that Skype has recently hired executives who have IETF working group experience such as Director of Developer Relations, Jason Frischl and Chief Technology Strategist Dr. Julian Rosenberg.

Bottom Line: Ever since the launch of SILK, it’s very noticeable when one is not on a SILK call. SILK can bring significant business productivity advantages when there’s less of “can you repeat that?” or simply misunderstanding of the speaking party. It makes everyone in the family more readily understood during those grandparent Skype video calls. It’s all about improving the end user experience.

There are many efforts to incorporate “wideband (8 Khz)” HD Voice into the telecom infrastructure. GIPS has some excellent wideband codecs; Jeff Pulver is running HD Voice conferences. While HD Voice is definitely an improvement on today’s standard PSTN voice calls it is not up to the quality of SILK-supported calls.

However, spreading SILK’s quality of conversation requires not only the appropriate hardware or client software, as described above, but also support of SILK in the telecom back end infrastructure. Having a standard that every player making the conversation connection possible can work towards would be a major step forward in “clearing up the conversation” when on a voice call.

Update: Skype’s Jonathan Christensen provides an update summary about the SILK codec in his Skype blog post “Advances in audio”. He reiterates the focus he described a year ago:

• improving audio bandwidth going from 8 kHz to 12 kHz, meaning that a SILK conversation sounds like you are in the same room as the person you are speaking with
• providing real-time bandwidth scalability to deal with degraded network conditions
• balancing codec optimization between voice, music and background noise, each of which can have an impact on the overall user experience
• delivering a robust solution that delivers a more consistent audio experience, regardless of network conditions and an individual’s voice signature

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The DECT 6.0-compliant RTX 3088 Dualphone allows North American consumers to continue to use their legacy PSTN phone service while seamlessly incorporating Skype into their routine “home phone” activities. And it’s one reason why you will see those Skype Mood Messages that say “Using Skype without my computer”.

Last fall In Store Solutions released a North American version¹ of the popular RTX Dualphone 3088, available on the U.S. Skype Shop. Its uniqueness results from its ability to work concurrently with both a PSTN line and a Skype account. Since then a few U.S.-based bloggers have taken the North American version of the Dualphone for a road test and provided some reviews.

First, a couple of general comments:

The DualPhone allows you to use Skype without a computer. This opens up new use cases that may require you to think about how you want to configure its use. In particular you may want to consider using a different Skype account from your primary Skype account for two reasons:

• If it’s to be a “home” phone, you probably do not want to have your “business” Skype calls going to every phone handset in the house
• It’s limited to handling 200 contacts on a buddylist. As pointed out by Stuart Henshall, if you have over 200 contacts in your primary Skype account, you want to think about whom you want to have in the Skype Contact list associated with use of the Dualphone. In my home phone deployment case, we use a separate account which only has about 25 contacts whom we call frequently. (Apparently the average number of Contacts per Skype Account is somewhat below 25.)

The Dualphone is limited to voice calling (over either Skype or the PSTN) and Skype presence information; it supports both a Skype Online number and SkypeOut services. However, as Stuart points out, there are situations where this suffices:

Who’s the DualPhone for?

I think you purchase it when….

• You want your wife/home to have an always on Skype connection when you travel a lot and they never became really Skype savvy. That also covers the use case where there isn’t an always-on Skype enabled PC.
• Small business perhaps? May make sense to dedicate another account to this phone and call forward your own Skype account (s) to it. This “shared” option could be useful but there’s no way to transfer from the phone to someone else. So don’t expect to make it a PBX.
• You want your parents to be on Skype but they are barely computer literate and again won’t have it on all the time. It’s a good way to keep them connected globally. The device is familiar and the technology disappears.
• You just love Skype to death, and cannot do without a traditional handset for yacking. This may be the best motivation for many, although the motivation to buy this handset is also tied into saving money and cheap calls. We’ll come to cost and investment later.
• You want to make Skype your landline equivalent (no 911) and get an account with SkypeOut and SkypeIn. Now your telephony is based on Skype costs and not the old style costs of the PSTN. The phone would payout in six months for most people. Unfortunately, landline numbers don’t seem to be portable or transferable. A variation on this. You could use Ribbit for your SkypeIn number and get addtional benefits and functionality while also staying in touch with your Skype buddies.

Jason Harris in his TechCraver review, mentions:

From a usability point of view, the Dualphone is pretty easy.  Techies will handle it just fine and I think most non-technical people can use it without issue as well.  Screen options allow you to add Skype contacts, adjust your online status and other routine Skype functions.

As for the static-y background sound quality issue raised by Jason, PhoneBoy says:

At home, I have this set up both with my landline and my personal Skype account. Calls to my landline and calls to my Skype account are set up with different rings (yes, you can do that). I have used it both for Skype and for PSTN calls and the sound quality is excellent. The connection between the base and the handset is DECT, making it both secure and WiFi friendly.

And Dameon (PhoneBoy) goes on to conclude:

If you’re looking for a way to make calls on Skype without using a computer and tie into your normal landline, this is a great device. It does exactly what it says on the tin. The pricing, though, presents a challenge: $170 for the base unit and handset, another $100 each extra handset. At half the price, it would almost be a no-brainer.

My own personal experience, using the Philips VoIP841 dualphone (same firmware as RTX model but no longer available), is (i) no issue with sound quality, (ii) the speakerphone is really handy for “family-participation” calls, (iii) having four handsets that are wirelessly connected removed the need to fix some phone line wiring when hit by a lightning strike last year – one RJ-11 jack for connection to the base station suffices and (iv) it’s “just worked” since I installed it almost two years ago.

Bottom line: When I see Skype mood messages that say “Using Skype without a PC”, it usually means they are using a dual phone; the RTX 3088 solves this issue. It’s probably targeted best at the home phone or home office market. The use cases, as quoted above, are definitely different from using Skype on your PC (or a mobile phone, for that matter).

And for the future: an ideal future Skype dual phone would incorporate the SILK codec (for crisp audio on Skype-to-Skype calls), a WiFi network connection, limited text messaging and a mute button. Is there a hardware vendor up to the challenge?

Note 1: What is meant by “North American” version? An appropriate power plug as well as support for the North American standard for a DECT 6.0 rf band.

Note 2: The RTX 3088 base station includes support for up to four DECT-connected cordless handsets; additional handsets are now also available at the U.S. Skype Shop.

Full disclosure: In Store Solutions has become a client of Denali InterConneXions, publisher of Voice On The Web, building on the author’s previous business development experience with establishing partnerships that can assist with the promotion of a primary vendor’s offerings. A more complete statement will follow shortly.

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Announcement of the Skype – Verizon agreement certainly has generated buzz around both the Mobile World Congress and the blogosphere. Last Wednesday morning, one day after the announcement, several bloggers and mobile ecosystem players came together on a CalliFlower-hosted SquawkBox conference call to discuss both the triggers for the agreement and the implementations.

Co-hosted by Carl Ford and myself, participants on the call were Andy Abramson (who had been listening to the jungle drums on-site at MWC), Hudson Barton, James Body, William Volk, Alec Saunders, Thomas Howe and Moishe Maier.

Topics covered included:

• Verizon’s history of invoking VoIP; the “game” for Verizon (Carl Ford 00:30)
• Why Verizon finally had no choice but to do the deal. (Andy Abramson 02:15)
• What were the competitive drivers? (Andy Abramson 03:20)
• How does Verizon benefit from this agreement? (Andy Abramson 04:20)
• Who are the real winners (and losers) from this agreement? (Andy Abramson 05:00)
• How does this differ from what 3 is doing with Skype in nine countries (Andy Abramson 06:50)
• Lost in the announcement: final release of Skype for Symbian (Andy Abramson 07:50)
• Applications implications I: initial thoughts from Thomas Howe (08:15)
• Is Verizon missing a market segment through their smartphone offerings (James Body 09:05)
• Is this net neutral and no risk for Verizon? (Alec Saunders 11:00)
• How this agreement is a win for RIM (Andy Abramson 12:50)
• Dumb pipe or embedded intelligence: (Andy Abramson, Alec Saunders 13:50_ [Note that my last question to Russ Shaw was meant to be quoted as “When can I say ’Call Russ Shaw on Skype’?”, not “on mobile” as stated in this conversation; all four carrier friendly points referenced in this discussion can be found here.)
• Perhaps the most informative commentary: Applications implications II: a very interesting perspective on the mobile application store market from William Volk who has several of the top selling games on the iPhone. Backed up with comments by Mr. Mashup, Thomas Howe  (17:25) Terminology: ECPM – effective CPM. Bill makes some very poignant points about the uniqueness of Apple’s app store and why Verizon’s Get-It-Now app store that has no appeal to developers.

Download

Posts referenced during the call or subsequently relevant:

• Carl Ford: Jim Courtney & Carl Ford Converse about Skype & VZW
• Om Malik, GigaOm: Skype & Verizon’s Fear of the iPhone
• Andy Abramson, VoIP Watch: Skype, Verizon (and Andy) In the News
• Om Malik, GigaOm: Skype CEO: Skype Over 3G on iPhone Soon
• Om Malik, GigaOm: Skype-Verizon Deal: More Details
• Andy Abramson, VoIP Watch: Todd Carothers Point of View on Skype-Defining The Battleground

Thanks to Angelo Mandato at RawVoice for his assistance with getting my first “podcast” up and running using the BluBrry PowerPress WordPress plug-in. And, of course, our thanks to all who participated in the call.

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Yesterday’s announcement that Skype will become available as a supported service on Verizon Wireless has to have sent a tsunami through the wireless operator world. To review the offering:

• A Skype client will be included on nine models of BlackBerry and Android smartphones in late March; current customers with these devices will be able to download the application
• Free Skype-to-Skype voice calling, both inbound and outbound, worldwide
• send and receive instant messaging (chat and presence) worldwide at no charge
• International SkypeOut calling; domestic calls come out of the customer’s voice plan
• Requires a Verizon voice and data plan
• Skype-to-Skype and SkypeOut calls as well as Skype IM activity will not impact a customer’s voice plan minutes and data plan usage.

The Background. Yesterday I wrote about the market environment and technology infrastructure that led to the ability to make this announcement

• It’s Verizon’s answer to AT&T’s forthcoming Skype for iPhone over 3G; however, given that planning and development activity have been ongoing for the past year, it’s a well thought out response with a focus on the user experience.
• The client will be a customized version of Skype Lite where the voice conversation is carried over the Verizon voice channel while presence indication, chat messages, mood messages and voice call signaling will be carried over the Verizon data channel.
• Launching a Skype voice call or chat session will be the same process as launching a traditional call.
• It’s integrated with the Address Book of the device such that all contacts can become Skype or SkypeOut contacts.
• Both the BlackBerry and Android smartphones can handle multi-tasking such that Skype “data” activity can continue to operate in the background while using other applications on the device.
• Client is optimized to take advantage of any battery life conservation features, certainly one of BlackBerry’s well known strengths.
• In response to one question at the press conference, Verizon stated they will not allow network quality to erode as a result of the additional load created by this service.
• Currently no video calling, file transfer, SMS messaging or WiFi access

Show me the money! Based on information provided by iSkoot at eComm 2008 and 3′s gradual expansion of Skype availability, it would appear at first glance that the business model involves:

• Verizon receiving a percentage of SkypeOut revenues (Skype has an affiliate program that provides referrers with 25% of SkypeOut revenues – an indicator of Skype’s margin for this service; 3 has offered SkypeOut since summer 2008)
• Skype receiving software licensing revenue associated with smartphone revenues (sales or lease) and Verizon voice/data plan revenues
• No termination charges for Skype-to-Skype calls (explains why Verizon can offer this as a free service to their data plan customers)

The implications:

• Has the potential to add 90 million Verizon customers to Skype’s user base
• Verizon customers can call over 500 million Skype accounts worldwide at no cost (probably about 100 million active accounts)
• SkypeOut becomes the de facto replacement for all Verizon’s other consumer international calling activity, especially for calls to those 44 countries on Skype’s Unlimited World Calling plans.
• Provides a subtle but significant carrier endorsement of BlackBerry and Android devices.
• Multi-tasking allows an “always on” user experience; the challenge will be when and how notifications are made of a Skype activity (presence status change, new chat message, etc.) when using other applications
• the underlying architecture takes advantage of the existing robust and scalable voice architecture while exchanging data over a wireless data service that is widely perceived as the best in the U.S due to the combination of its reliability and coverage.
• requires the installation of “Skype gateway” servers within Verizon’s infrastructure to terminate Skype calls under Verizon’s management and control, offset by the fact that there are no termination charges for Skype-to-Skype calls.

The downside: The architecture does not allow for WiFi access to Skype. As a result:

• one cannot readily make calls from WiFi access points outside the U.S. without paying roaming charges which can tend to be expensive. (Skype for iPhone on AT&T or T-Mobile’s @ Home service provide this capability.)
• calls cannot be made from locations without carrier network coverage (to a large extent Verizon’s U.S. geographical coverage addresses this issue but one can also be deep in a building with WiFi but no carrier).

The Questions:

• Will Skype Instant Messaging become a replacement for SMS messaging and cannibalize SMS revenues? Skype IM messages simply go out over the data channel as one application for the data plan.
• What happens when a Verizon customer is roaming in other countries?  Can visitors to Canada or Europe continue to use Skype at no additional cost while in Canada? or will a roaming charge apply?
• Verizon is currently offering these devices with a “Buy One Now, Get One Free” feature and a two year contract at prices ranging from $29.99 (Storm 1, 8530 Curve)to $179.99 (Storm 2). Will the lack of a low cost phone, such as 3’s Skypephone2, with Pay-As-You-Go impact adoption?
• What is the level of carrier exclusivity in the deal? Will we be seeing similar offers from T-Mobile US or AT&T any time soon? What portions of the embedded Skype software in the devices are  exclusive to Verizon?
• Who will be the first Canadian carrier to adopt the Verizon-Skype model? This will be interesting to follow given that:
  • there are no network quality issues with any of the three
  • the Bell Canada/Telus networks can not only support EVDO (same BlackBerries as offered by Verizon) but also GSM/LTE supported devices with their new HSPA+ network launched in time for the Vancouver 2010 Winter Olympics.
  • all three carriers now offer the iPhone; in this case Rogers was the original carrier with it.
• What level of support will Verizon provide for BlackBerry’s app store and Android’s market? Will Verizon facilitate and promote them or even provide an aggregated app store?

Final question: Skype stealthed its way onto AT&T 3G through the combination of supporting calling over WiFi access points (worldwide) and FCC lobbying; Skype is certainly helping to drive iPhone sales at AT&T. Can the combination of carrier-supported “free international calling”, full multi-tasking, a more robust and reliable network and the currently top selling smartphone brand in the U.S. sustain and build Verizon’s user base?

Bottom line: carriers are recognizing that Skype needs to incorporated into their infrastructure as a key element providing both uninhibited access and the network resources to ensure a high quality, positive user conversation experience. Most importantly they are discovering that Skype can become a marketing tool that drives market differentiation and user adoption.

For further commentary Carl Ford and I recorded a podcast conversation yesterday: Jim Courtney & Carl Ford Converse about Skype & VZW.

Update: Andy Abramson has been on-site at MWC and picked up some feedback: Skype, Verizon (and Andy) In the News

Photo: John Stratton, executive vice president and chief marketing officer for Verizon Wireless, and Josh Silverman, Skype’s CEO, announcing their strategic relationship to bring Skype to Verizon Wireless smartphones during a press conference at the 2010 Mobile World Congress in Barcelona, Spain earlier today. (Via Business Wire, accreditat[on not provided)

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Full disclosure: This post was prepared prior to today’s press conference using information that was publicly available prior to the conference. In the second post I’ll discuss the service as announced at CES today.

When you can advertise “Free phone calling internationally”, they will come! In the CES interview with Skype CEO Josh Silverman, Josh makes the point about how Skype draws in customers by offering a free service that is easily adopted by consumers and then offering “premium” services, such as SkypeOut calling, to generate revenues. This model has led to:

• over 580MM registered Skype accounts (probably 100MM are currently active)
• over 12% of international long distance calling minutes are Skype-to-Skype calls
• and revenues approaching $1B per year.

As mentioned in the recent CES interview with Russ Shaw, Skype’s VP & GM for Mobile and EMEA, Skype’s partnership with Hutcheson Whampoa’s 3 service in nine countries has delivered interesting carrier-friendly results from 3’s customers who take advantage of its free Skype-to-Skype calling:

• 20% higher margin
• 17% additional traditional voice minutes
• lower churn rate
• high ARPU (average revenue per user)
• over 1 billion Skype-to-Skype minutes delivered in the UK since Nov. 2007

Results that should get all wireless carriers’ attention! And Russ did emphasize these results to reinforce where some of Skype for Mobile’s current activities and resources are being directed.

Setting the stage in the U.S. market for today’s Skype-Verizon announcement:

• Verizon has a reputation as offering the best high speed (3G and faster) wireless data services within the U.S. and nobody’s complaining about their voice quality.
• AT&T’s major strength appears to be its iPhone arrangements
• AT&T’s network performance issues, especially with their data service, are well documented (even their voice channel failed me on my last two trips to the U.S.)
• The major failing of the iPhone that impacts Skype for iPhone is its lack of multi-tasking capability
• Skype has announced they will be making available Skype for iPhone running over 3G – a service that will only be available on AT&T for the duration of the current Apple-AT&T agreement
• Verizon needs an offering and drawing card that will compete with AT&T’s forthcoming ability to offer a Skype-based service on the iPhone.

So it should come as no surprise that Verizon is announcing an agreement to offer Skype on several devices including the BlackBerry line and the Android phones they support.

The Service Architecture

Based on information that has come out over the weekend and content archived on this weblog, this service is modeled on an architecture similar to the iSkoot architecture used for 3’s service whereby data (Skype chat messages, presence and call signaling information) go over Verizon’s data channel but the actual voice calls are connected to the phone via Verizon’s (robust and readily scalable) voice channel. As a result:

• Call quality is limited by the (3.7KHz) audio bandwidth of the voice channel (in particular, no SILK superwideband quality calls)
• Verizon has no termination charges for calls to Skype contacts (or what amounts to being a Skype-to-Skype call – a key factor in making this service cost effective from the Verizon perspective)
• There is no loading of Verizon’s wireless data network (and the associated backhaul demands) with the heavy demand that would be placed on it via a true VoIP client.
• The resulting “Skype for Verizon” Skype Lite client on the BlackBerry and Android devices  has no support of calls via WiFi access points.

So the Verizon-Skype announcement certainly builds on previous Skype technology and business model experience; it will take advantage of proven and demonstrably reliable carrier voice and data services. I’ll have more in the follow-up post covering the actual announcement.

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At CES 2010 last month I had the opportunity to record interviews with Skype CEO Josh Silverman as well as Russ Shaw, Vice President and General Manager of Skype Mobile and EMEA, and Matt Jordan, Enterprise Business Development Manager.

In this second interview Russ Shaw covers a wide range of questions about Skype on different mobile phones, the business model that complements wireless carriers’ goals and other challenges as Skype executes on its mobile component of “Skype Everywhere”.

In the first segment Russ discusses revenues from Skype for Mobile activities, execution on the Nokia agreement and the Sony Xperia, the challenges of working in the mobile ecosystem and carrier partnerships. Russ emphasizes that Skype for Mobile’s main goal is to get usage on as many mobile devices as possible as part of the Skype Everywhere goal.

In the second segment Russ discusses Skype for BlackBerry (announced last spring but still running a beta trial), their learnings from the beta and how to ensure a positive user experience. He then goes on to explain how Skype can provide a carrier partnership business model that, based on Skype’s experience with 3, can be a complement that builds a wireless carrier’s overall business. He then provides an analogy of how O2 used a freemium model to build their business around free offerings of music; free Skype-to-Skype calling is the basis of a freemium model for carriers. We go on to discuss Skype for Android in the next segment. This is followed by asking Russ to sum up what’s ahead for Skype on mobile smartphones.

But then I ask one closing question that would really support “Skype Everywhere” in a very common user situation; I can only supplement the discussion by pointing out that, when I get into my car, a Bluetooth-enabled BlackBerry is on my belt (with my Otter Box Defender case). And, during the discussion, Canadians will learn about one more Skype service coming soon to Canada.

Bottom line: Is 2010 the year we can access our Skype contacts worldwide from the majority of smartphones? How many carriers will really catch onto the “3” business model and adopt Skype as a formal offering? And will I be able to get into my car and simply say: “Call Russ Shaw on Skype” to make a hands-free Skype call from my mobile smartphone?

Update: As mentioned above Russ talks about the success with 3 using Skype and the Skypephone. Just prior to posting I learned that 3 has now logged 1 billion minutes of Skype-to-Skype calling. In their summary notes 3 states also that “Over 2m people use internet services like Skype on 3” out of their 4 million active UK customers. (BTW, this is not the only story I have heard about how Skype is helping to maintain communications with Haiti; I have seen a few Skype video calls as television interviews as well; probably makes for another story.)

Of interest: Russ has authored an article at Connect World, Mobile operators should co-operate with application and content providers to take advantage of the mobile Internet boom, where he discusses the  issue of mobile operators working with VoIP providers to build their overall business where he supports the success with 3:

There is already some evidence that the entire discussion is based on a misconception, and that, in reality, using the Internet to make calls does not cannibalize the revenues of operators. Some operators, like Three in the UK, have already changed their business model. They are challenging their competitors by partnering with a software company, offering a popular application that allows mobile VoIP calls at no extra cost, providing their customers with a very tangible extra value and comprehensive user experience by integrating the application into a range of mobile handsets. As a result, the group of customers using these services generate 20 per cent higher margins than non-users, voice revenue being a key contribution to this. A survey undertaken in August 2009 revealed that users of this application used on average 17 percent more traditional voice minutes than non-users. Next to this, a comparatively lower churn rate and higher ARPU (average revenue per user) was one of the positive outcomes as well. [Author's bolds]

Other Skype executive interviews from CES 2010:

• Skype for Business: An Interview with Skype’s Matt Jordan
• A Conversation with Skype CEO Josh Silverman

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Skype’s announcement today of agreements to have television sets become end points for Skype video calls really raises a series of both user interface issues as well as social issues:

• Do I want to be interrupted while watching programming such as a sporting event or Oprah?
• Where is it more convenient to talk: via a TV audio channel open to the room or a traditional handset with its inherent conversation privacy and reduced potential to interrupt a roomful of family and/or friends?
• Where do we want convergence? How much do we want to have application-specific hardware?
• Do we want scenarios where all those in the viewing room are exposed to the call?
• What clothes shall I wear while watching TV but enabled to be seen on a video call?
• If Skype is introduced into TV sets, how far can the inherent intelligence and Internet connectivity be deployed in a way that encourages user adoption of additional features and services? (SlingBox in the TV?)
• What Skype account(s) does one want to come via the TV? An separate account? A personal-use account? A business-use account? or combinations of these accounts. (For the Philips VoIP phone on our Rogers Home Phone service, we use a separate Skype account from my normal Skype “business-use” account.)

Why do I raise these questions? Consider three related user experiences I have had:

• When the Turin Winter Olympics opened in February 2006, I happened to be on a Skype call to an acquaintance, Peter, in Sweden while watching the CBC broadcast of the opening ceremony in my office via my newly acquired SlingBox. He was also watching the same opening ceremony on Swedish television. Our conversation was intertwined between the original purpose of the call (to address some technical issues) and comments on the opening ceremony. It was an interesting experience but note that we were watching and discussing the broadcast while being able to watch it.
• Recently Rogers quietly added a TV Call Display service that brought a feature of our Home Phone service to our TV set. Namely when someone calls us the caller ID information appears along the bottom of the TV screen along with options to Send to Voice Mail, Snooze (disable the call notification for up to 2 hours) or change the TV Call Display settings. Bottom line: it’s a minimally obtrusive service that actually provides call information prior to the phone(s) ringing and let’s you have options for dealing with the call without leaving your viewing chair.
• It’s real handy to have a PVR service that continues to record a program while viewing other programs; the other service that comes handy when there are conflicting sports events is Picture-in-Picture.

Skype’s TV Video calling currently has to be in an early adopter (or launch) phase. It simply replaces the currently viewed program with the video call taking over the screen and effectively becomes another Skype client. (More Skype Everywhere?) Obviously the TV set has to be both “intelligent” and Internet-enabled; this explains both why the HDMI 1.4 cable specification includes the ability to incorporate an Ethernet connection and why new higher performance  intelligence has to be introduced into TV sets (or cable set-top boxes).

But, partially based on my experiences described above, for a fully featured user experience we need to see:

• On-screen notification of a call while watching a broadcast program along with options to take the call or send it to a voice mail (or video mail) service.
• Ongoing recording of the currently viewed TV program in background on the PVR while on the call.
• Picture-in-picture integration to allow a viewer to monitor a program while on a call (or switch between the program and calling party as the primary display content).
• Multi-party calling (is this a potential revenue generating service for Skype?)
• Forwarding/transferring of the voice channel of the call to another Skype-enabled device such as the RTX 3088 Dualphone or mobile smartphone, or forward both the voice and video channels of the call to a Skype client on a PC.
• Chat or text messaging capability.

Given the size of the somewhat saturated HD television set market it needs new features to go beyond simply HD capability; using the TV as a Skype end point becomes one option to enhance the TV feature set. From the user perspective, on the other hand, it becomes one of many choices for handling (Skype) conversations. It certainly adds to the “Skype Everywhere” theme but how far do we want “everywhere” to go?

Bottom line: going forward we are going to see a range of attempts at convergence of our communications. But we are left with many questions:

• How much intelligence do we need within our “end point” devices? (I just acquired a Blu-Ray player that has an active Ethernet connection for firmware updates and additional content information delivery).
• Should the Skype intelligence be in TV sets or does it make more sense (and for broader distribution of Skype) to have the Skype intelligence in a set-top box, such as our Scientific Atlanta Explorer box?
• What additional services would intelligence in the TV or cable set-top box could be delivered by the cable service providers?
• How intense will the competition become between TV set manufacturers and cable set-top box manufacturers to control the intelligence behind these services? What can the set manufacturers and the cable companies see as business models for these competing offerings?
• Can this video calling intelligence be brought to mobile smartphones? Do we need LTE or 4G networks to make this happen?

At a minimum, the introduction of Skype’s TV client gives us talking points for the upcoming CES 2010 later this week.

Additional links and information:

Share Skype Blog: Get Skype on your TV

LG Electronics to Unveil Broadband HDTVs With Embedded Skype Capability

Skype and Panasonic Announce Collaboration to Add Skype Software to Viera® HDTVs

Brad Stone, New York Times: A Venture Integrating Skype Into the Family Room

And, as for the Hockey Picture on the captured TV screen: tonight Canada will be defeating the U.S. for World Junior Hockey supremacy once again…. fortunately I will be able to watch it live on my flight to Las Vegas. Something to do in this era of minimalist carry-on luggage.

In the lead-up to the forthcoming eComm Europe Conference organizer Lee Dryburgh interviews some of the speakers. This past weekend he posted an interview with GIPS CTO Jan Linden (picture below) and CMO Joyce Kim where they talked about (i) the role of codecs in delivering overall high quality HD voice and (ii) the emergence of H.264 SVC as a video codec standard.

Lee started off the questioning by asking about where the audio codec plays its role in delivering wideband audio and HD voice; Jan responded by talking about “the total HD voice experience”:

A codec is obviously an important part, but it’s not everything that makes the HD Voice experience. If you look at the analogy of a car, you have a lot of different things like tires, body, steering wheel, etc. and – the codec – let’s say that’s the tires. It’s one very important part that makes the whole thing run smoothly, but without all the other pieces, you don’t get the full experience.

That said, we’re very much focused on HD Voice, and the things we do, in addition to codecs, is things like jitter buffer and packet loss concealment. Those are things to address what happens on the network. We also address things that handles on the device, like sound card. For video, it’s cameras, microphone adjustments, speaker adjustments; all those things are necessary for the great experience.

They go on to talk about how GIPS is emerging as a full R&D facility, innovating incrementally and building voice quality expertise in a way such that third party attempts at replication run up against time-to-market issues due to GIPS’ long term experience with codecs. (Ed. – Perhaps Skype, with its SILK codec and experience with network bandwidth management is the only other company developing superwideband HD voice at this level.) When asked about where SILK could play a role Jan responded:

We do so much more than a codec, and in fact, SILK is a very attractive codec for our customers to use, in conjunction with the rest of what we do. Again, we look at SILK as the wheels or the tires of the car and we provide the rest of it to put the whole car together. That means that SILK, standard codecs like G72.1 AMR [G.721] wideband, you name it; they all fit into our solution.

Lee then opens up a discussion about GIPS’ widely implement iSAC wideband codec and the recent development of a superwideband mode for this codec. Lee effectively summarized GIPS role in the market, for companies that want to incorporate voice and video calling into their offerings, stating:

Okay, so what you’re doing is knocking down time to market for companies and you’re also knocking down the cost of providing voice – audio, I should say, to be more general, and video solutions for devices, software, and so forth. It’s about time to market, it’s about saving money.

Lee, Jan and Joyce then went on to talk about the emerging H.264 SVC video codec and its layering architecture that optimizes performance in a video conference that bridges a range of end point devices and the various devices’ respective network speeds. Click here for the complete interview. But since that will be the subject of Jan’s talk at eComm Europe 2009, I’ll end this post by suggesting that you consider attending for the conference to learn more details.

Click here to register with a 10% discount.

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Stefan Öberg, Vice-President, Skype for Business, provided his overview on “the future of modern business communications” at Interop last week. He started off by outlining his perspective on how consumer adoption of Skype is building business adoption from consumer experience; he feels this is driven by:

• • Economy: 43% percent of knowledge workers in US enterprises with 500 or more employees already use non-company-owned equipment on enterprise networks and systems.
  • Connectivity: We live in a world with an increasingly ubiquitous, pervasive and affordable communications infrastructure, which encourages new acquisition and delivery models, especially those using the web.
  • New technology: A combination of affordable devices, low-cost communications, widespread ownership means that access to and acceptance of new technologies is growing.
  • Employees: Employees bring their experiences and expectations from the ‘real world’ into the work environment – this is particularly relevant when considering an increasing population of digital natives in the workforce.

Recently Voice On The Web has reported on a couple of examples of this trend:

• Stealthing Skype into Larger Businesses
• Stealthing Skype into Healthcare: Consumer Experience Drives Practitioner Adoption

Stefan went on to provide some statistics coming out of user studies carried out last year:

• 20% of our users make Skype video calls for business purposes †
• 95% say they are saving money *
• 62% say they communicate better with customers using Skype *
• 70% say they are using it while traveling on business *
• 80% say they are seeing increased productivity *

* Source: Skype user study of 4,000 users in the US, UK and China conducted in March 2008
† Source: Results from a December 2008 online survey of 2452 active Skype users in the US and UK

Stefan makes some good points, supporting more quantitatively what we have suspected about perceptions of Skype use in business.

However, when he went on to talk about Skype’s expanding ecosystem via Skype for Asterisk and Skype for SIP for penetrating the business market, his brief mention of business infrastructure for Skype (including the Business Control Panel) neglected the services provided by several of Skype’s Software Partners on which Voice On The Web has reported in the past:

• OnState: Virtual Call Center and Virtual PBX
• Managed Collaboration:
  • InnerPass: Team building that Integrates Skype with business grade document management
  • Yugma: desktop sharing across Mac and Windows platforms
  • Lotus Live Unyte: the pioneer in business grade desktop sharing using Skype
  • HiDef Conferencing (now Citrix Online Audio Services Group): a high quality, managed conference calling service
• PamFax: converting your PC into a worldwide accessible fax machine
• Pamela: a comprehensive Skype utility for call management, conversation archiving, personalizing conversations and a bit of fun
• Skylook: combining Skype with Outlook to deliver effective, yet low cost, customer relationship management; turning Outlook into a conversation manager and archive
• Evoca: hosted voice recording for building audience engagement and participation across news services, television documentaries and websites or weblogs (a description and review of Evoca’s new Express services is in preparation).
• (and, if I have missed any Skype Software partner with a business application, add a comment and I’ll update)

Bottom line: While certainly Skype for Asterisk and Skype for SIP will expand the reach and promotion of Skype through their respective distribution channels (Digium/Asterisk ecosystem and PBX vendors), ongoing innovation is also occurring and being adopted in the Skype Software Partner ecosystem. The current economic conditions are accelerating adoption of these conversation management services as businesses, whether entrepreneurial SMB’s or business units of larger enterprises, search out ways to grow their business but at significantly lower costs. More examples of Skype Everywhere driving business model disruption.

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Apparently the Skype-Nokia partnership announcement has irked some legacy European carriers such as Vodafone, O2 and Orange according to Mobile Today:

A rift has emerged between Nokia and operators over its plans to incorporate Skype onto its Nseries handsets, Mobile has learned.

O2 and Orange responded furiously to Nokia’s declaration that it will equip its upcoming flagship Nseries device, the N97, with Skype.

If the row is not resolved the two operators may refuse to stock the N97 – or any future Nseries handsets containing Skype – unless Nokia strips out the Skype client. The two operators are understood to have vented their anger in high-level discussions, which involved group level executives from Nokia.

However, Hutcheson’s 3 has seen great success in providing access to Skype for calling Skype contacts, making SkypeOut calls, exchanging presence information and holding text chat conversations. For the past year I have been making calls to Skype contacts from my BlackBerry 8820 and Bold via iSkoot and IM+ for Skype over my Rogers subscription. And I have been beta testing Truphone for BlackBerry.

Unfortunately for these carriers they did not attend last year’s eComm conference where iSkoot CEO Mark Jacobstein made a presentation “Operator Friendly VoIP: No Longer an Oxymoron”.

So what’s the background and where can having Skype access as a carrier offering be of a win, not only for Skype and its partners such as iSkoot, but also for the carriers:

The background:

• A scalable, robust channel for handling voice over wireless already exists. The data channel can transmit text plus information related to setting up a voice call.
• Device resource issues, especially battery life but also processor speed, memory resources and display issues, challenge the ability of current smartphones to handle calls using a VoIP client at a sustainably satisfactory level of reliability.

Recall the basics of the architecture and voice call process:

1. Use the data channel for handling text messages and the information required to set up a Skype voice call session
2. Use the existing voice channel for making the voice connection from the mobile device to an iSkoot/Skype/etc. server via a “local” point of presence.
3. The client on the device is designed to handle Skype IM over the data channel; however, when a voice call to a Skype contact is initiated, data for setting up the voice call is sent to the server. The server then triggers a wireless call from the server back to the mobile device while also calling the party on Skype from the Skype session on the server. (Effectively the Skype session on the server uses a variant on Skype’s inherent multi-party calling feature.)

Why is this architecture carrier friendly?

• Carriers continue to obtain revenues for local minutes
• Data plans are required to handle text and the call setup information
• There are NO termination charges for calls to Skype contacts
• Carriers can share in the revenue for SkypeOut calls
• The ability to advertise “free calling worldwide” is a very attractive marketing message for customer acquisition.
• At least in the case of the Skypephone, actual hardware costs eliminate the need to subsidize the handset. This advantage will obviously vary by device vendor.

AT&T eventually recognized that the iPhone presented a significant market share grab opportunity for recruiting customers away from its competitors. 3 accelerated its rollout of Skypephone once it saw the market response in the UK. New carriers launching in Canada and the U.S. will be looking for programs to attract customers from the incumbent wireless carriers. Thinking outside the traditional business model is necessary for carrier survival; cost effective innovation, for both the customer and carrier, will always win out in the long term.

Vodafone, Orange, O2 and others will have to succumb to the market reality that the Skype offering is a win-win for those carriers that adopt phones incorporating this implementation of Skype mobile software and architecture, whether Nokia, Android, BlackBerry, Palm Pre or any other smartphone with an inherent multi-tasking capability.

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Software developer and publisher PamConsult pioneered third party software development for Skype, having provided the initial German translation of Skype and then launching the first Skype Extra, Pamela in 2005. Two weeks ago PamConsult released Pamela 4.5 for which a review is forthcoming. Their PamFax offering won accolades as the 2007 Skype Partner mashup competition.

But the PamConsult team has also been busy developing software that interfaces home TV sets with Internet-based services. A recent announcement provides a window into how consumers will interact with these services simply through their TV’s remote control.

Just a little over two years ago, the Pamela team linked up with Scendix, publisher of “digital home” software for Windows Media Centre, to form PamConsult. For instance, mceAuction allows you to bring eBay onto your TV screen via Windows Media Centre; mcePhone for Skype provides easy access to Skype from your TV. More recently Scendix released Jaast for Wii, leveraging their mceAuction technology into the Nintendo Wii console. Scendix also developed an eBay Skype Tab used in German and French versions of the Skype for Windows client. While attending CeBit in Hannover two years ago I had the opportunity to experience these offerings first hand; the simplicity of their user interfaces via a TV remote control opens up new opportunities for consumer access to eBay and Skype.

Last Thursday, Philips announced a new line of LCD TV’s which will include a new feature, called Net TV, that will deliver Internet-based services and modules to the viewer’s screen via the remote control. From the Philips press release:

The Net TV feature will be available on all Philips televisions in Europe in the 8000 series, 9000 series and Cinema 21:9 from Spring 2009 onwards. Through Net TV, Internet content is tailored for the best possible viewing experience on the TV screen, and is easily accessed through the TV’s remote control, without the need for extra set top boxes or service subscriptions, or for starting up a laptop.

PamConsult, leveraging their Scendix experience and technology, yesterday announced that they will be providing the eBay channel for Net TV, designated as “eBay, Powered by Jaast”:

Internet with remote control on TV/Media Center/Wii are things we have been working on for years and thus we are proud to say that eBay and Philips have selected us to provide an eBay channel on the new sets.

Based on our mceAuction technology we have adapted the eBay content to work seamlessly on the new Philips systems.We will provide the channel via our Jaast brand.

eBay navigation on the TV is very simple, the same intuitive way of browsing eBay as with mceAuction on Microsoft Media Center and Jaast on Wii.

Given Scendix’s experience with Skype, how long will it be before their mcePhone for Skype technology could be showing up on Philips’ offerings? More importantly does this provide a path for Skype to deliver “Skype Everywhere” through TV as Skype announced at their CES 2009 press conference?

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