The Skype press conference with Verizon wasn't more than an hour over when Brian Deagon of Investors Business Daily rang up to ask my take on the move by Verizon to work with Skype. Brian is one of my favorite IBD reporters because he asks the kind of questions that get to the heart of the story first. He doesn't wade in to the story where the facts can get in the way of it. No, no. Brian is a reporter who does his homework and then writes it. Just like he did yesterday.
My opening response was "Verizon Wireless has become the dumb pipe of wireless" taking a page from David Isenberg's famous "The Rise of the Dumb Pipe" that he wrote back in 1997 when he was with AT&T Labs. Truer words have never been written. I then went on to explain that this was a "if you can't beat 'em, join 'em" effort by Verizon Wireless to become revenue recovery specialists. That means they already know that the international long distance market has moved to Skype. Heck, all you have to do is read the Telegeography reports that shows that Skype has 12 percent of the market now for international Long Distance. I then explained that getting a slice of the Long Distance pie that Skype has is better than losing it all together, which is exactly what has happened. Skype, like Google Voice and Truphone are the alternative long distance carriers now for the International market, and each has in their own way, very distinctive and very different value propositions for Mobile Operators.
Beyond losing the battle for LD, Verizon Wireless is also very much suffering from iPhobia--the condition caused by the runaway success of the iPhone by Apple. Pal Om Malik, who was cut off in his line of questioning at the press conference yesterday by Verizon's designated hitter, Jeff Nelson, echoes and amplifies that in his post last night entitling the post "Skype & Verizon’s Fear of the iPhone."
Om ponders if the deal with Verizon Wireless is exclusive. My sources tell me it's not, but what is the exclusive piece of the deal is the customized Skype handset software and integration with Verizon Wireless' network. I'm also hearing that WiFi, which is not yet available, and file transfer are likely going to make it into the next version. The other element that is missing is roaming.
In the Investor Business Daily story Brian Deagon quoted me as saying "Skype is the winner..." and they are. By taking a deal on likely Verizon's terms, Skype gained unfettered access to the top smartphone manufacturers and deep working relationships, especially with RIM, HTC and Motorola. Just like the have with Nokia.
Oh, speaking of Nokia, Skype last week quietly updated their Symbian client to a full blown P2P client architecture. This tells me that the iPhone 3G version is likely next to come, as the Android and RIM clients work has to be finished for a while otherwise Verizon would have to open up their EV-DO network. And, they don't want to do that just yet, as their fear of Skype swarming over EvDo would put them in the same league as AT&T, the brand they are trying to distance themselves from when it comes to their network.
Update: Sentiment on this announcement by both GigaOm and IBD were pro-Skype, as is Techcrunch with their coverage as well.