Skype by the numbers – Update
Skype, the world's most popular program for making free overseas phone calls over the Internet, was released as a free download to Apple's (AAPL) iPhone and iPod touch on Monday. You can get it here.
This could be big. How big? Let's look at the numbers.
- In 2008, Skype users spent 33 billion minutes talking to people in other countries, representing 8% of all international voice traffic, according to TeleGeography Research. (link)
- That makes it the world's No. 1 provider of cross-border voice communications, according to the same report. By comparison, Verizon (V), iBasis (IBAS), and Tata (TCL), each provide about 20 billion to 30 billion minutes of international traffic each year. (link)
- Skype ended 2008 with 405 million user accounts, a 47% increase from 2007. (link)
- Skype is adding new users at the rate of 35 million subscribers per quarter. (link to pdf)
- Skype usage hit an all-time peak on March 23, 2009, when more than 17 million users were online at the same time. (link)
Despite all this, Skype is said to be a disappointment for EBay (EBAY), which acquired the Luxembourg-based company in 2005 for $2.6 billion. EBay had hoped that buyers and sellers on its online auction site would use Skype to chat about their purchases. When that service didn't click with users, EBay had to write off nearly $1 billion of its Skype investment, according to Businessweek. (link)
Adding to EBay's disappointment is the fact that revenue from Skype users isn't growing as fast as its user base. As Businessweek points out, its 2008 Q4 sales of $145 million were up just 1.3% sequentially, even though registered users increased 10% in the same period. (link)
So now Skype is making a big push into what's expected to be the real engine for future growth: VOIP (voice over Internet protocol) calls made over cell phones, a field Google (GOOG) is also exploring.
In January, Skype became available on phones that run Google's Android operating system, including T-Mobile's (DT) G1. In February Skype announced that Nokia (NOK) will be selling smartphones with a Skype client pre-installed.
Late Monday, shortly before midnight, Skype came to the iPhone and iPod touch — an installed base of 30 million users. In May the company plans to release a client for selected models of the Research in Motion (RIMM) BlackBerry.
There are already several VOIP clients available on the iPhone, including Fring, Truphone and Nimbuzz, but none has the name recognition of Skype.
iPhone calls between Skype accounts are free, but in deference to AT&T (T), its U.S. partner, Apple will allow them only to be made over Wi-Fi connections, not over AT&T's cell phone network. [UPDATE: 9to5Mac reports that when run on a beta version of iPhone 3.0, the Skype app allows calls to be made over AT&T's 3G network.]
Skype calls to landlines and cell phones not running the Skype client are charged a fee. These are usually considerably lower than overseas rates, but higher than charges made for calls within networks.
So, where does that leave SKYPE-PRIME BETA? Launched and accepted by many like myself to work at from home, is now difficult to access from SKYPE 4 and even more difficult to get any replies on from SKYPE. I really want to know what the future of SKYPE-PRIME is to be.
NuShrike is that a shot at Apple? Well, RIMM is getting Skype in May – does that make it okay since RIMM is getting it, too?
David/Ithica – you do know people make calls to people who live outside the U.S.? So, making international calls on Skype saves a lot of money instead making long distance calls on ATT – adding to that $40/mth bill. Just because you only have family & friends in NY doesn't mean everyone does. We live in global society, except you.
Works on iPod touch 2nd Generation only, not 1st Generation. Need a headset with embedded mic, that's what I read.
The lockout from AT&T's network seems pretty shortsighted. Users still have to pay AT&T for that subscription. And the option to have skype would bring more users to the iphone and, as a result, AT&T.
AT&T and the Iphone would get a really nice bump if they didn't lockout Skype, this is obviously more about control than profits.
@TJ
The first generation iPod touch doesn't have audio in. The second generation does, so you can use a suitable headset.
If iPhone 3.0 software unlocks the Bluetooth chip in the iPod touch you should be able to use a Bluetooth headset with the second generation touch.
I think many here are missing the prize. This isn't a huge deal for iPhone users but the boom will be in iPod touch sales. I've been looking for a decent voip for the iPod touch and this may be it as it may be for many. Think about it. You have a cheap cell phone contract for the out of wifi range stuff then an iPod touch for everything else. Or in countries where there is a lot of free wifi hotspots, just the iPod touch which can make and receive calls on the cheap.
I'm an investor in EBAY, and a Skype user. I place many calls from Argentina to the U.S. on a regular basis.
As a Skype user, I was thrilled when, earlier this year, Skype added a new plan where I pay $5.95/month for unlimited calls to U.S. phone numbers! Previously, I had to pay 6 cents per connection plus 2 cents/minute.
However, as an EBAY investory, I didn't understand the move. Previously, I spent about 50 dollars a month on my phone calls! I am now spending 6 dollars/month. So, in my case, they lost a lot of revenue. Personally, I think that Skype is underpriced. As a Skype user, I'm not complaining, but as an investor I am 
Jason
"Skype usage hit an all-time peak on March 23, 2008" – surely that's 2009…?
ex ped: Right you are. Fixed. Thanks.
Who cares about making calls over 3g on skype? You're still paying $40 a month for the phone service so you will simply be wasting that money if you don't choose to make calls thru at&t.
Does the iTouch have a microphone? Thought it didn't.
ex ped: It's supposed to work on the iPod touch with a headset with microphone.
Thanks Phil.
@ JK Newton,
For this to be true, Wi-Fi would have to be available at any location worldwide.
How long before someone figures out how to make Skype calls on AT&T's network? I'm sure AT&T is not liking this development, and it's free!
The slides from the CTIA presentation of Skype are here http://tinyurl.com/c9odx7