Skypephone changes everything

Skype, the internet phone service, is all about disruption.

I remember thinking, when I first started using Skype back in 2004, that here’s a small, nimble company that will drive a massive wedge into traditional telephone service business models.

From a user perspective, the model is dead simple and highly compelling – free phone calls via your computer to other users of the service, and very low cost calls via your computer to ‘normal’ telephone numbers, literally anywhere on the planet.

Skype (and its later competitors) has changed the way millions of people around the world communicate where prohibitive costs of using a phone service are no longer a huge barrier – a barrier erected by the big telecommunications operators.

Arguably, Skype has played a not insignificant role in the changes we’ve seen in the past few years in many countries, notably in Europe and North America, with those very same telecommunications companies, what they offer, and how they price it.

Parallel to all this are continuing advances in technology, especially the rapid growth in broadband internet penetration in many countries and changes in people’s behaviors in terms of what they want, how they want it and when they want it.

This is especially the case with the so-called digital natives, the younger generation who dictate change through their own insistent and influential behaviours.

There’s no better way at the moment to drive this point home about changing behaviours (and expectations) than The Rise of the Mobile Super User, a thought-provoking 49-page white paper written by Will Harris and available on free download from Edelman.

These reflections were going through my mind yesterday during the press launch of the Skypephone (pictured above), a joint offering from Skype and UK mobile operator 3, which I attended.

It says to me – this changes everything.

We’re moving up a big notch, from broadband tied to computers and so the geographical restrictions on the things you can do (like make and receive free phone calls), to broadband untied, on mobile devices.

Some would argue that this isn’t new – you can get net access on mobile phones already, and have been able to for some years; and, depending on the device, install and use Skype.

True, but not like this.

Not an offering from a mobile operator – one of the perceived ‘bad guys,’ if you can take that expression in positive context – that gives you a device that’s centred around Skype which simply lets you connect with people in whatever way you choose: free via Skype, as well as with any other mobile phone on a cellular network.

No, what 3 and Skype are doing with the Skypephone is driving another wedge firmly into the next generation of communication – mobile.

I can’t think of anything that would have prevented any other mobile operator – Vodafone, O2, T-Mobile, Orange… take your pick – from doing something like this other than maintaining the high pricing status quo.

Skype would be willing – in the briefing, Skype acting CEO Michael van Swaaij quipped that Vodafone can call him any time for talks.

But who in their right business mind would offer a handset and associated services that includes making and receiving calls for free via their network? A crazy notion, isn’t it?

Well, if it’s crazy, then welcome to the asylum!

It gets better when you think of business use of a product like the Skypephone.

One of the questions I asked Kevin Russell, 3’s CEO, in yesterday’s press briefing was how he saw business opportunities for the Skypephone, given that it’s being positioned right now as a consumer product.

His said if (I’d day more likely ‘when’) 3 were to target businesses, it would be the small- to medium-size business sector (which is a classic Skype business target).

But he mentioned anecdotally that his first sale of a Skypephone was to the CEO of a large company who wants to communicate with his 10,000 employees.

That’s the thin edge of a very wide wedge.

I was also interested to hear Kevin say that experiential marketing and word of mouth will play significant roles in 3’s marketing and communication of the Skypephone and engagement with users and influencers.

So don’t expect any 30-second TV spots. Instead, look for blogosphere and related online commentary.

Following the press briefing, I spoke with John Penberthy-Smith, 3’s marketing director. Our conversation included this topic.

That interview will be posted soon as an FIR Interview podcast (and I’ll add a link in this post when it is).

The Skypephone goes on sale in the UK on November 2 for £49.99 (talk about affordable) on pay-as-you-go, and free if you take out a contract.

It will roll out elsewhere in Europe and Australia in the coming weeks. There are no current plans to offer the phone in the USA.

I have not one but two Skypephones to play with for the next three months, courtesy of 3. Review to come (taster: this is one very cool gadget!).

Meanwhile, you can follow what other Skypephone players are doing with their phones at 3mobilebuzz.

[Technorati: 3skypephone]

Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Andrew

    As voice becomes ‘just another service on the network’ it is refreshing to see companies like 3 recognize that they can take advantage of applications like Skype to sell access to their backbone. Skype clearly competes directly with their core business; a core business they recognize that is disappearing quickly as the price runs to zero.

    Some would argue that 3 is just swinging for the fences in order to gain market share in a very competitive wireless market (in which they are bleeding badly) but I think it is a concerted effort to differentiate themselves as a wireless data provider of choice.

  2. Stephen Davies

    I love 3 as a brand and mobile carrier, and have been on their network for about nine months now.

    I’ve also had Skype on my 3 mobile for the same period of time too so this new phone isn’t really revolutionary.

    The X-Series is pretty geeky, however, so maybe they’re making a push for the more general user with this new phone? Think I’ll stick with my X-Series though as it’s got a lot more additional applications. Including Mobilcast which is very handy to stream FIR when I’m out and about. :)

    This is next on my list. Who needs a static internet provider these days?

  3. Danny Thompson

    I am one of the “Experientials” who was at the product launch on Monday and also have a pair of these handsets.

    What they do for Skype and 3 is to completely de-mystify the mix of Skype and regular phone calling. The exquisite little Ameoi handset’s firmware is spot on in design and functionality. To make a call, look up a Contact and a choice of regular PSTN or Skype (if their ID is previously stored) is offered. There is almost no reason to even know how to work Skype! It really is that simple.

    The hardest thing that 3 and Skype have to do is to get this thing marketed to people who know little of and care even less about Skype. But regular Skype users should be a natural buy-in.

    I will be watching how they get on from 2nd November. I hope it is a success if for no other reason than to shake the incumbents out of their complacency.

  4. neville

    Thanks for that contribution, Danny. Great explanation.

    It’s clear to me that the Skypephone can do a great deal in broadening Skype usage to a wider user community.

    Stephen, having Skype on your phone is great, undoubtedly. But this particular Skypephone is built to 3’s (and, I guess, Skype’s) specifications: it’s a purpose-built phone centered around Skype, unlike one from a manufacturer like Nokia which you can get from every mobile operator. The Skypephone’s low price will undoubtedly be a massive draw too.

    The Skypephone’s not only about Skype: it also has access to places like Facebook, eBay, YouTube, etc – as you have on your X-Series. I’m not sure it has a lot more apps than the Skypephone, which has a lot!

    And I’m not saying the Skypephone is better than the X-Series you have. Just different, and will appeal to probably a different type of user.

  5. Stephen Davies

    One thing I noticed on 3’s latest Skype phone is that you can I.M (using Skype’s I.M service) whereas on mine it’s strictly calls. And, yes, I had a bit of a “doh!” moment after writing my last comment when I saw the new phone has a lot of the features the X-series has.

    I’ve just been using mine to speak with Melanie in Michigan and the quality was perfect.

    3 is certainly taking the bull by the horns in the mobile telecoms arena and, quite frankly, my bills have never been cheaper since I’ve been on the company’s network.

    I really can’t see myself moving to another carrier in the foreseeable future.

  6. Danny Thompson

    I keep finding new things on the 3 Skypephone – even after several days using it fairly extensively.

    I had moaned on our forum that it was hard to find a SkypeChat if someone sent unsolicited. But the solution is to go to Contacts and then press the right-scroll part of the joypad which lists all of the SkypeChats. Talk about a “doh!” moment :)

    Even if Skype is not used – this is one cracking PAYG handset for a penny under fifty quid (thats £49.99 in new money). And this handset fully makes use of 3’s portal content. The amount of free stuff on there is amazing – News, Weather and much more. The 3 Skypephone handles it all very well – fast and very clear.

    The lack of HSDPA does not show at all, the content files are small enough to make ordinary 3G look fast. I’ve reacquainted myself with 3’s ITN News vids.

    I would happily have one of these as a second handset to compliment my contract handset (another network). Especially if I were a regular Skype user – which I’m not. Hmmmm, decisions decisions.

  7. neville

    I use Skype every single day. I love Skype on a mobile phone. On this phone in particular. Expecially IM. It’s great!

    The only issue I’ve had so far concerns 3’s 3G network. Basically, reception’s crap where I am even though the network map on 3’s website shows strong and blanket coverage in my area. But the network connection fades in and out (usually out) at random times, all the time. Pain in the arse when you’re on a call.

    Since Tuesday, I’ve spent quite a bit of time on the phone (BT landline!) with 3’s tech support. We figured out today that the Skypephone will only work reliably here on 3’s normal GSM connection. Not good. But at least it works.

    So no real critique of the phone itself but of 3’s cell network.

    Anyway, I’ll have a first post up re my initial impressions of the phone as soon as I get a minute to finish it. Probably at the weekend.

  8. Alex Manchester

    I’m watching this launch with interest but I do find it ironic that in your case, Neville, the issue that’s blighting the experience is the one that has plagued 3 since launch in the UK. You’d think it would be better by now to the point of not being an issue – especially with a 3G coverage dependent device?

    Also, dare I ask, where is the ROI – for 3 or Skype?! ;)

  9. Danny Thompson

    Alex, the 3 Skypephone is not dependent on 3G coverage, it will work happily as a 2G device. But if the 3G is marginal then, as always, the quality will suffer – particularly if it is switching betwixt 2G and 3G. But you are absolutely correct – after near on four years isn’t it about time 3 had better 3G coverage?

    ROI? For 3 it has to be re-entry into PAYG with a decent proposition. For Skype, perhaps it will encourage more to take on Skype In/Out on their PCs. But remember also, this is Skype’s first such venture and they did say that 3 wouldn’t have the exclusive forever! Read a lot into that, I would :)

  10. neville

    I’d echo that, Danny. 3’s 3G network just doesn’t work reliably where I am. But their 2G network is just fine for Skype use, no problems with that at all.

    However, glitches do happen if the networks switch, eg, I’m on the move and the phone sees a reliable 3 3G connection. It will then switch which seems to knock Skype out for a bit, usually requiring a re-login. A bit of a nuisance.

    If you want to use your Skypephone for the other things you can do with it that really do need a 3G connection, you’re a bit buggered if you’re in my area :)

  11. Alex Manchester

    Skype over the 2G connection makes a lot more sense so thanks for clearing that up. Again, that switch between 2G and 3G is something that’s been a pain since 3’s launch, but it doesn’t sound so bad these days :)

    ROI is an interesting one, though, particularly as Skype or VoIP in general becomes more widespread in business. As stated at the start of this post, it’s a very disruptive proposition and will be intriguing to see how it pans out.

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