Skype is moving beyond the PC, but sticking with its IP heritage. Yesterday, Skype announced that it will begin selling WiFi enabled handsets later this year. The handsets, offered by EdgeCore, Belkin, SMC, and Netgear will enable Skype users to place calls whenever a wireless network is present. No PC needed.
Primary competitor Vonage already offers off PC calling via “traditional” handsets that remain in the home. It also offers a USB phone that turns any PC into a virtual phone whenever the PC is connected to a network allowing for outside of the home calling.
Skype’s announcement offers even greater flexibility. Users will have functionality in their home and anywhere else that a wireless network is present. While this is a great idea, it may be a technology still a bit ahead of its time as a standalone device.
Without WiMax or other alternatives reliably available throughout the United States Skype users will be forced to bring both a Skype handset and cell phone to ensure ample coverage. Otherwise calls would be limited to whenever a user is in range of a WiFi network. Such coverage will not be robust enough to replace cell phones for a number of years.
This is an opportunity for Skype to demonstrate that there is a legitimate business model behind WiFi phones. For the short term, dual mode WiFi and cellular phones create an interesting opportunity. Dual mode phones would provide ample coverage everywhere and should offer savings to the consumer over existing plans.
The question that must be posed is how does a carrier monetize free WiFi calling in the long run? Is there a limit on WiFi minutes that can be used or a cheaper per call rate? This seems counterintuitive to the idea and business model of Skype. As the business models are evaluated, Skype is attempting to put distance between itself and its competitors.
