Skype phone unveiled

I’ve just returned from a press event in London where Three andSkype unveiled the much-rumored ’skypephone’, a custom-built mobile phone which allows users to easily make skype-to-skype calls for free.

The phone itself has all the features you would expect: 2.0 megapixel camera, mp3 player, 3G. I have one in my possession, and itis a light, thin phone with a good screen. User experience lives up to the promises, and it needs to be; it was made very clear that this is a phone aimed at the non-techy consumer. It is possible to sign up to Skype using the handset, and existing users can log in and instantly see all their contacts.

The price point is also set to make Skype phone a mass market device.It is available on0 Prepay for �49.99, with a monthly top up of £10 required, or free on Contract, for a minimum of £12 / month including 100 minutes and texts.

It’s not all good news; unlimited data isn’t included in the tariff from Three, although that’s not a deal breaker, given the monthly unlimited data plan available. More significant, however, is the absence of SkypeIn and SkypeOut from the offering. These are important features of Skype which do have an important use in a mobile context.However, SkypeIn and SkypeOut are being worked on with a sense of urgency, according to Skype.

There can be little doubt that this will be a successful device,given the feature set and the low price. So Three will get some extra customers, and reduce churn by having an extra unique selling point.However, the real story is what Skype achieves through this. By getting itself on lots of mobiles, Skype moves from being the communications method people use when, for example, it is significantly cheaper to, orwant to do a video call, to a primary method of communication.

As Skype’s acting CEO pointed out, widespread adoption of this would enable people to say ’skype me’, knowing that wherever they are, they are reachable through Skype. If this becomes a reality, Skype stands to gain more users and massively increased revenue.

There are some unsolved questions; there is an inevitable tension created by having two communication systems sitting side by side on the same device, with revenue from each of them going to different parties.Every time I use Skype on my phone, I am depriving Three of revenue from chargeable minutes. This will be exacerbated when SkypeOut is available - it is in direct competition with Three.