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Skype On iPhone – End Of Cellular?

By Chris Gomez - Posted on 05 April 2009

It's been a long time coming, but iPhone 3G users can finally rejoice at this bit of news – Skype has finally become available on the App Store last week. Now iPhone users who complain of bad reception and call difficulties can now bypass the networks and make clearer calls, and disregard the alternative of putting up their own cell tower in the backyard.

Of course, Apple won't let Skype take over the revenue it gets from AT&T and the other carriers. Using Skype to make free calls through the iPhone can only be done under Wi-Fi coverage – you can't use Skype in your carrier's 3G and EDGE networks (aherrmmm... that is until someone comes up with a workaround ;)). Nonetheless, I think this is another attempt at shaking up the cellular industry – one that can change some pretty big things down the line. Probably bigger than Mobile Video + Google Voice + YouTube + Grand Central + Android. Dammit' I didn't want this article to be about Google... but theeeeere I go again.

Skype calls aren't really all that different from other telephone calls – everything is data being routed over the carrier's networks. There's no real reason to charge different rates for processing the same kinds of data. This is one of the main reasons why the “astronomically high” rates charged to text messaging has been under fire for several years. With Skype, even text messaging would feel too expensive.

The idea of having Skype on smartphones isn't all that new. Some other smartphones, like those that run on Windows Mobile, have had it for a while. The use of Skype on mobile phones have also been tried outside the US and it hasn't really made all that big of a dent on carrier revenue. So why is Apple limiting things with Skype?

It's really simple – the problem isn't about revenue. But when Skype becomes available through millions of iPhones around the world, carriers are going to have to deal with the flood of data that'll come through. Most likely the state of their current networks won't be able to handle all that.

Still, I'm thinking maybe this is going to be another big transition in the industry down the line, similar to the move from traditional mobile phones to smartphones that's going on today. I'm also pretty sure it's going to spark smartphone makers to include Wi-Fi capabilities in all smartphone models they have on the drawing board. Believe it or not, more than 70% of all smartphones today don't have Wi-Fi capabilities.

So what's next for smartphone carriers today? It's really up to anyone who has the guts to jump onto the bandwagon completely. VoIP has been around for quite a while – it's just that most carriers just weren't prepared for it to appear in the smartphone party anytime soon. If someone manages to make calling through Skype easier than calling the traditional way, they'll stand to make a killing – and even steal some of the spotlight from the iPhone and Blackberry.

Then again **hint hint* who said Apple, with their uber-successful iPhone and Mac lines, are already working on the possibilities of voice over WiFi (VOW)?  :)

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