Skype Security Breached? Don't believe it.
Skype security broken? Don't believe it.
It has been widely reported that Skype's security has been breached and that Skype itself can no longer be trusted because it "lied" about what it was doing in China through. The reports are alarmist, and they appear to have been created just to make trouble. The source of the "reports" (infowar) is a report that Skype's partner in China (TOM) is passing information about Chinese political dissidents to the authorities. Here are a few links from ; itwire, New York Times.
I remember when the TOM relationship was announced a couple years ago.Most of what is in the current inforwar report was known at that time, and we also knew that Skype was not being "transparent or forthcoming about the exact nature of their compliance with Chinese authorities". Although Skype did not admit it at the time, it was widely believed that text containing naughty words and phrases was being handed over to Chinese authorities.In other words, many of the revelations in this paper are not news. My own view at that time (and now) was that the Chinese efforts to censor and abuse privacy are amateurish, and that any dissident with a brain would simply avoid the suspected keywords by substitution, like "burnt toast" for "Communist Party". Or if a dissident suspected he was a general target then he would just not use Skype.In other words, like most of Communist China's efforts to maintain control, this one's worst effects would be nuisance and cost to the Chinese taxpayer.Only stupid people and those that were not reading the news could ever be caught in this Chinese trap.
Aside: The TOM method does not mess with Skype encryption, but rather just grabs text before it is sent and after it is received.
At the time Skype initiated the TOM relationship and submitted to the grievous censorship, it was widely thought:
- that there were competitors who would take over if Skype didn't submit.Yahoo for example had a VOIP/IM system that seemed competitive.
- that Chinese citizens would fail to acquire normal copies of Skype and that they would be effectively blocked unless it was officially accepted.
- that Skype "needed" China to survive.
Now of course we know that Skype's fears were unfounded, but that's hindsight.
- Yahoo and every other similar competitor have proven to be duds.
- Skype has been extraordinarily effective at circumventing firewalls. The only places where they have been at all effective are small countries like UAE.China has tried to control its information infrastructure, but those ambitions quickly run up against its desire to participate in the global economy.
- As of today, Asian participation in the Skype cloud is about the same as it was 3 years ago.... 25% according to my calculations http://glimfeather.com/borderless/ Within that 25%, there are several countries that are at least as important to Skype as China; Australia, Japan, India, and Malaysia to name a few. I would guess Chinese participation in the Skype cloud (TOM and normal Skype clients)at about 5% or less than 2 million "real users".One might rightly ask whether they were worth the effort and whether they would have become "real users" anyway.
Conclusion:China pried (and got nothing), Skype lied (stupidly and maybe inadvertently), Trust died? (probably not).
Skype CEO divulges the future. Reading Silverman's tea leaves.
Everyone here has undoubtedly seen the interview with Skype CEO Josh Silverman. Interesting comments on conferencing, video, mobile, and Skype innovation. GigaOM pressured him hard with a request to get Skype onto mobile devices, especially the iPhone. Silverman seemed to say that big changes in that department and others are just around the corner. By reading between the lines, I am guessing two things about upcoming changes in Skype:
- Skype has figured a way of putting something onto the iPhone, maybe just text initially. I made a stab at understanding the technique back in June.
- Skype has figured out how to do conferencing (video and audio) much more effectively, which of course is why they dumped skypecast so abruptly. I'm trying to understand the ways by which enterprise-scale and enterprise-quality conferencing might be accomplished (while maintaining the advantage of having no central servers). It might be possible.
Basically, Silverman said that Skype will continue to emphasize multi-factor communication (where it has an enormous advatage), but that it now is attacing in two areas; mobile and conferencing (especially video). Given that Silverman's talking points seemed so well prepared, I would guess that changes are right around the corner. On the other hand, Skype might once again be just blowing smoke.
Why is Skype growing?
It is certainly not because of service excellence toward customers. The verb "skype" has become almost synonymous with providing bad service.
It is certainly not because independent developers are enthused about Skype as a platform for companion services. The fact is that developers have never been able to figure out how to establish secure and profitable businesses in conjunction with Skype.
So what is it that propels Skype's continuous growth as measured by "real users"?
Phil Wolf of SkypeJournal just put his finger on it. "Cheap is Skype's gateway drug". Skype enthusiasts continuously ponder why it continues to grow while disappointing both customers and developers with bad service. Answer: because its prices are absurdly low. People perceive, despite all its problems, that Skype is underpriced relative to its competitors... or that they are overpriced relative to Skype.
Until and unless the discrepancy between the pricing of Skype and its competitors is narrowed, Skype will continue to attract new customers (net) at a rate that beats them all. It can do this because it is by far the low-cost competitor in its markets; telephony, messaging and video.
We can complain endlessly about service and lack of development opportunities, but Skype will never change its ways while its formula for growth and profit is working so well.
Skype is poised for strong fall growth
Skype set new records for concurrent and "real" users today (September 2nd, 2008). Concurrent online at 15:15 GMT was 12,744,917.
Following the usual summer slowdown, it looks like things may pick up faster this year than even in 2007 which was very vigorous throughout the fall season. I did not expect to see new highs for several weeks, so I'll probably upwardly adjust my year-end projections if the trend continues much longer. The current projection for year-end is 36 million "real users". See the home page for comparisons.
Skypecasting Terminated. Has Skype stopped eating its young?
A few days ago, Skype decided that it would discontinue its free Skypecasting service. There were actually two versions of Skypecasting; public and hidden. The public version was a spammy service where any idiot could create a voice chatline and invite other idiots to join. The "hidden" version was entirely different; more like a regular conferencing system where you set up a time, topic and joining link which you then could offer to individuals directly.
I disliked the public version intensely, mainly because the content was uninteresting and of low quality, but the "hidden" version was a very acceptable way to handle large scale conferencing.
A few months ago, we did some head-to-head comparisons of various conferencing tools that one can use with Skype (Calliflower, Skypecast, HiDef, and regular Skype multiparty calling). In terms of voice quality, our conclusion was that Skypecast ranked highly in that list). In terms of features and ease of setup (hidden Skypecast), it ranked poorly but that was highly subjective, platform dependent, and certainly correctable with software upgrades. In other words, Skypecast was competitive in the emerging VOIP conferencing market.
Skype says that the decision to terminate was based on the fact that they didn't know how to make Skypecasting viable economically. I hope that this is not the case, for it would suggest that they did not appreciate the existing quaities of their own product, or the many ways that it could have been improved, or the many ways they might have monetized it.
I rather hoped the reason for canning Skypecast was that Skype judged its relationships with HiDef, Calliflower and other 3rd parties to be more important than its own prospects of economic success with large scale voice conferencing. Unfortunately, that seems not to be the case; it remains an open question whether Skype has decided to not compete with its 3rd party developers. Skype had an opportunity here to refresh its relationship with 3rd party developers, to prove that it has turned against its reputation for eating its young. Having celebrated Skype's 5th birthday, we're still waiting for some organizational maturity.
Speculation over back door in Skype
Here we go again, another rumor that Skype's encryption isn't working, or worse that it is intentionally compromised.
People who claim there's a "back door" in Skype are like those who believe they have seen visitors from outer space. But just try convincing them that they don't exist. The unprovability of it all is evidence to them that Skype and the evil governments they collude with are even more sneaky than we ever imagined.
Oh wait, I've got it, eBay paid what they did for Skype because there are secret and lucrative contracts with certain goverments to lure criminals into using Skype where they will surely be caught ... unaware of the fact that all their conversations are being taped. Sounds like a 007 plot.
Come on folks! It wasn't more than a couple months ago that the German police were complaining that Skype was preventing their ability to catch crooks, and now the Austrians are suggesting just the opposite. Somebody should get these countries talking to each other.
The press is making fools of all of us as we run around in circles following the latest rumors. I beg you to look at the structure of Skype and tell me how you think a "back door" would work in this environment. Nobody, absolutely nobody has such a theory and they most certainly don't have any actual evidence.
Proof that Skype is struggling
By definition, increases in "real users" (usage) over the past three years is composed of new registered user and of existing customers deciding to use Skype more than they had in the past. It is more of the latter than the former. Existing Skype users are finding ways to incorporate Skype into their communication routine. Revenue per user is in a steady upward trend, going from less than $9.00 per real user per year in 2005 to more than $16 per real user per year currently. It indicates greater use of SkypeIN and SkypeOUT. Also, video usage is in a steady upward trend (0% in 2005 and 28% of Skype/Skype calls today).
Because we know that increasing "real users" are coming from greater usage by existing Skype users, we know that new "real users" coming into the Skype cloud through the registration process is minimal. The hypothesis therefore is that while Skype is satisfying existing customers and enticing them into higher usage, it is not satisfying new customers. They are discarding their downloaded Skype software at a large and increasing rate.
Intuitively, we know that this is true because newbie Skype users have become famous for expressing dissatisfaction with Skype's support services. We have more direct evidence when we look at the Skype usage rate (ratio of "real users" to registered users). The usage rate has been dropping steadily since eBay bought Skype:
| Report Date | Real Users | Skype 'Names" | Usage Rate |
| January-06 | 11,008,823 | 74,700,000 | 14.74% |
| April-06 | 15,441,003 | 94,600,000 | 16.32% |
| July-06 | 16,583,302 | 113,000,000 | 14.68% |
| October-06 | 18,812,315 | 136,000,000 | 13.83% |
| January-07 | 21,361,366 | 171,000,000 | 12.49% |
| April-07 | 23,486,370 | 196,000,000 | 11.98% |
| July-07 | 23,946,787 | 220,000,000 | 10.88% |
| October-07 | 24,187,325 | 246,000,000 | 9.83% |
| January-08 | 27,202,646 | 276,000,000 | 9.86% |
| April-08 | 31,741,318 | 309,000,000 | 10.27% |
| July-08 | 32,225,437 | 338,000,000 | 9.53% |
So what's going on here?
- The number of registered users continues to expand at a rapid pace.
- The core of Skype's user base is becoming more deeply committed to Skype services. They have discovered in its feature set a communications "platform" that exceeds that of its competitors. That core is driving up Skype's revenues and is giving Skype hope that it can someday grow into a telecommunications giant.
- The successes in #1 and #2 disguise the fact that Skype's real user base (usage) is not expanding at a rate commensurate with the overall user base. The usage rate was over 15% when eBay bought Skype, is now 10%, and it may soon become 5%. A smaller and smaller percentage of Skype users are committed to Skype as a communication platform. The rest are drifting away as Skype fails to capture their attention.
Skype is still unique. No competitor has yet put together a plausible challenger, but the uniqueness won't last forever. One might reasonably ask whether the isolated group of developers in Estonia, as talented as they are, can keep up with the pace of change that is necessary. Also, Skype leaders have never reached out to their community of independent developers or to their core community of users, so how do they actually come to decisions on corporate strategy? Has Skype to some degree isolated itself from its market and from the reservoir of ideas that might reverse the trends? Does the core group of Skype users that is producing all its growth have incentives to evangelize the platform and to bring in new markets? These are rhetorical questions.
Highlights and lowlights of iPhone 3G, plus more pie-in-the-sky(pe).
Like everybody else on the planet, I listened intently to Apple's Steve Jobs on Monday as he laid out the course for iPhone's second year. In bullet fashion, this is what I heard:
- Price
The reduced price to $200 and iPhone's entry into many additional countries (60+) will propel iPhone to maybe 20-30 million users over the course of the next year. It will be tough for anybody to compete with that. Every cellphone manufacturer (example: Nokia), every cellular operator that does not have a relationship with Apple (example: Sprint and Verizon), and every communications technology (example: Blackberry and Skype) have reason to worry because price alone makes iPhone an integrated communications game-changer.
- Push Platforms
iPhone's 2.0 software brings full compliance with enterprise requirements using MS Exchange, including "push synchronization" and lots of new security, which makes iPhone an incomparable enterprise-ready mobile platform. Then, "for the rest of us", Apple offer similar features using "MoblileME", the successor to dotMac. This latter service seems destined to become a platform for great web applications... Lots of potential here, especially with the beefed-up location services that are facilitated by GPS.
- Development
The API is proving to be excellent. Something like 4000 applications for iPhone now exist or are in some stage of certified development. No mobile platform can even come close to that. Developers love it. It is like the difference between MacOS and Windows in 1990.
- Hardware
As for hardware, I do not think the speed increase in iPhone 3G is revolutionary. 3G networks are not universally accessible, and if they were then,
- iPhone usage is only partially dependent on 3G (the other part being WIFI)
- 3G is still not an IP service with enough capacity to handle mass market VOIP and video IP
- Apple's claims about greatly improved battery life in iPhone 3G are probably greatly exaggerated. We'll see.
- Background Processes.
There was no overt announcment of iChat or Skype coming to iPhone, so I admit it; I was wrong in my prediction. However, I think Apple did send a message that IP communication for iPhone will arrive this fall.
- First, they did a demo of AIM (AOL) which is a messaging service very similar to iChat. It proved that IP communication is possible on the iPhone (using WIFI), and also that it is fatally flawed until and unless the problem of background processing is solved.
* Apple does not want background processes on iPhone because they sap battery life. Communications programs like Skype are very noisy with respect to background processes, depending heavily on them to maintain updated status and data in "the cloud."
- So Apple announced that this background processes problem would be solved with a "notification system" and that it will be implemented in September. It remains to be seen what the system will look like, whether it will be suited for p2p systems like Skype, or just for central server systems like iChat. Phil Wolff of Skypejournal is pessimistic regarding a push notification system for Skype. He suggest that it will not scale to the degree required. I am not so sure, so here's my speculative pie-in-the-sky(pe) look at how a notification system might work:
- The size of the required notification system is not really all that big. Skype's record high for users online at any one time now stands at 12.6 million. On average there are just under 10 million concurrent Skype users online around the world. If half of them were iPhones
. that would be just 5 million concurrent iPhone/Skype users. Nobody is predicting iPhone will achieve that much Skype penetration, so perhaps 1 million is a better forecast. Who knows? More importantly, how many notifications per hour per iPhone would you expect? Whatever the number is, it cannot possibly be an impossible task for a reasonbly capable server.
- An iPhone might not need the same notifications as a regular Skype client. For example, can it survive without status and mood updates? Does it really need to be queuing friend requests? It certainly doesn't need to be considered as a potential supernode, and it doesn't need to babysit file transfers if it makes no sense to store files on an iPhone anyway (better to route them to an archive on MobileMe)
.
- Therefore, a bare-bones but workable notification system for iPhone might consist of just IMs, voicemails and missed calls. So it's starting to look even more doable... A hypothetical iPhone based skype client would publish an iPhone flag into the Skype cloud, which would in turn cause notifications for that client to be posted either directly to Apple's notification server, or be routed through an intermediary server run by Skype.
So there it is. Please comment on this analysis in Borderless Feedback
Apple to challenge Skype with "iChat"
Will this become a new marketing theme for Skype, or for Apple? Young child points to the computer monitor and says "Grandpa"... associating the computer's monitor with seeing grandpa in a video call, and making the machine come alive.
Rumor has it that iPhone, which is due for upgrade release today, will be accompanied by an upgrade release of iChat, including a version for Windows. If true, then let's not be surprised to see a marketing campaign along the lines of the above from Apple. Such an ad campaign could have been launched by Skype a year ago, because the software certainly has the capability, but iChat which now will have comparable cross-platform features may well reap the greater reward. Look for iChat to challenge Skype in the days ahead.
See my earlier blog on the same subject (April 30).
More growth ahead for Skype. The new callerID feature in North America eliminates a huge roadblock.
The lack of callerID when calling a landline or a mobile phone has always been one of the two or three drawbacks to using Skype as a standard "telephone" in the North America. As of yesterday, that problem has gone away. A Skype user can now choose whether to display a mobile phonenumber or an "online number" (a.k.a. SkypeIN number).
If past experience is any guide, the advent of a feature as important as the ability to display a callerID should result in a spurt of growth as people reassess their telephony options. Things have been pretty quiet for Skype since February, so the improvement is coming at an opportune moment.
UPDATE: Friday June 6th. The surge is already taking place. At 1500 GMT today, we witnessed a new record for a Friday with nearly 11.8 million online concurrently. 200,000 new Friday users that had never been seen before were in the Skype cloud. It will not be surprising if the number of "real users" grows by more than a million this month (June). At that rate, with real users totaling 33-34 million, Skype's YTD growth will be double last year's pace.
A Simple comparison chart for the generations of cellular technology
As we move into an era of broadband wireless for IP communication, let's compare the past, present and future generations of cellular, which carries the bits that comprise our mobile voice, video, IM, and data connections. I call the integration of these bitstreams "CKIP" (Cyber Kinetic IP).
Hopefully everyone will find this simple chart helpful when one of the broadband wireless competitors makes an outrageous claim. The "top speed" listed in the chart is theoretical, not real in any practical sense:
| CELLULAR CATEGORY | SERVICE TYPE | Real Speed Kbps | Top Speed Kbps | Notes
|
|
2G | CDMA, TDMA(GSM) | 100 | 500 |
2G cellular is digital (1G cellular was analog), but it is not "fast" enough to support broadband wireless services (CKIP). More importantly, services that purport to support Skype or VOIP in a 2G environment are misrepresenting themselves because the carrier signal is not IP. CDMA is served in the USA by Verizon and Sprint mostly, and it is used a few other countries. GSM is dominant worldwide. |
|
3G | HSDPA, EVDO | 400 | 4,000 | Essentially, HSDPA is a software upgrade from GSM, and EV-DO is a software upgrade from CDMA. The latest versions of each 3G flavor are, in theory, fast enough to support broadband IP (CKIP) services, at least under ideal conditions. As a practical matter however, it still too slow and there are capacity limitations. More importantly, it is still not an IP service so the criticisms of 2G applies here as well. In the US, Sprint and Verizon use EV-DO. AT&T uses HSDPA.
|
|
4G | WIMAX, LTE | 800 | 8,000 | All flavors of 4G are designed for true IP, which is to say that VOIP and other CKIP services like Skype can be supported without bridges and other unnatural adaptations. In the long run, the LTE flavor (from AT&T and Verizon) may prove to be superior to WIMAX (from Sprint and Clearwire), but the differences are not significant from a user's perspective. What is important to understand is the deployment schedules, which for WIMAX is 2009-2010 but for LTE it is 2011-2012. Specifications may change, and other 4G technologies could come into play, but the two-year head start for WIMAX gives it a huge advantage over LTE.
|
How to turn off the firehose of communication.
Andy Abramson commented last week that one of the side effects of the mobile era of Internet development is the proliferation of texting at the expense of voice communication.
It is true of course that the growth of small devices is making text messaging more common. I would add that the quality of writing (grammar, punctuation, and thoughtful elaboration) is simply horrible in this environment, and the reason is that it has just become too easy and too cheap. The marginal cost of text communication is essentially zero. It is frustrating when, because of the "friends" and contacts that we make, we can't help but read redundant, boring, sensationalist, silly, inaccurate and worthless blogs, micro-blogs, feeds, notifications, tweets, and other types of "messages" endlessly popping up on our devices (fixed and mobile).
On the other hand, other communication media are showing the same spam-like tendencies for essentially the same reason. More every day, people are being swamped with teasers to listen to worthless podcasts, to watch quirky videos, to join stupid conferences, and to download strange images or applications.
The current generation of communication devices supports multiple types of Internet communication (text, talk, video, and file sharing). The service contracts for these devices are increasingly "all you can eat". As a result, the marginal cost of all types of communication, not just text, is essentially zero. Because of this cheapness, we cannot expect standards to remain high. With greater volume come lesser quality.
The challenge of communication in the next generation is to find ways to be more selective. My suggestion is to rely increasingly on moderated multi-media conversation.
Aside: Skype public chats serve these objectives in the following ways:
- They are conversational.
- They are moderated.
- They are multi-media (the foundation is text but they present a springboard to voice and video conversation and conferencing).
- If they are published then you can throw URLs, images, and music/video clips into them. You can follow people of interest or topics of interest as participant or just as viewer. People can follow you and the topics that interest you without disturbing your flow of conversation.
Prediction: Iphone 3G will have an IM and a VOIP component when it is released in a few days. It will be called "iChat", and it will be accompanied by new Mac and Windows iChat clients.
I predicted this a year ago when iPhone was first released, and it didn't happen. So here I go again under an assumption that sooner or later I have to be right. While Apple may soon clear the pathway in the iPhone API to allow Skype onto the iPhone platform, I suspect the damage will have already been done.... Apple will give its own iChat VOIP client a headstart.
This does not mean necessarily that iChat's voice feature will use the 3G cellular network. In fact, I think the voice and video features will be exclusively for WIFI connections. Nevertheless, this may well become a tough competitor for Skype. The IM component of iChat is already a solid match for Skype and very popular since it interconnects with both AIM and gTalk. Similarly, the video component of iChat will be a tough competitor in low bandwidth environments since it is a hosted service while Skype is pure p2P.
More speculation: The phone company (AT&T and others) should be very pleased with such a development (iChat). They can handle more traffic at the same price and with no increases to infrastructure. Origination and termination of calls for iPhones connected to WIFI will happen on the Internet rather than on a costly cellular structure.
As for the computer-based versions of iChat, I expect that the consumer will be able to pair the software client with an iPhone and its AT&T cellular contract. Imagine it. You have one phone number. It rings on both your iPhone and your computer. You can call out from either one interchangeably when you are on WIFI. You can intercom between them even if they are on opposite sides of the planet. And if you have more than one iPhone, your computer based iChat client will pair with with all those iPhones simultaneously, thereby eliminating every need for a hard-wired "telephone." Oh, and you can also do video, file transfer and IM all within an encrypted envelope... just like Skype.
Will iChat become Skype's first serious challenger? Let's wait and see.
Skype and the Social Mesh. How can we make Skype more social?
Join me tomorrow, May 22nd at noon Eastern Time in a Skypecast for a discussion of "Skype and the social mesh. How can we make Skype more social?" I'm going to keep my fingers crossed for whether it's really going to work.
If I have to join one more "social" group or build one more list of "friends" I think I'm going to scream. I already have MySpace, Twitter, Xing, Gather, FriendFeed, and of course Facebook where whenever I do anything like join a subgroup or establish a connection with somebody it becomes news for all the other people who claim to be my "friends". I feel sorry for them for my lack of discretion. Endlessly, we are querried with "What are you doing now?" or "What's your mood?" Well hey, I'm sitting here in my pajamas waiting for my dog to die. Satisfied?
Seriously, every time I blink it seems somebody wants me to join another social network like LinkedIN. Enough is enough. What would be the point if the feeds and threads of conversation of even the most illustrious persons or family members I might choose to follow are no more illuminating or less banal than "I'm going to go take a shower now." There is such a thing as too much information, and OMG why don't they just partner-up with each other so that joining one is tantamount to joining all?
The social model these new services offer is vastly different from the social model that preceded it in Internet history. The new social model is one in which you acquire "friends" and then the threads of conversation that you can see or join are generated from those relationships. Participation is usually offered on an all-or-nothing basis where granting status as "friend" is giving an opportunity to expose every thread one's consciousness... and there are very few spam filters.
The Internet's older social model, if you want to call it that, is one in which you join a defined thread of conversation such as a mailing list or a public Skype chat and then if you wish you can contact individuals in that conversation as need or opportunity arises. All things considered, I sometimes think I prefer the older model. Maybe it's just because I'm old, but it seems to offer safer and less frenetic social connections. The "cc" line of an email, Usenet and Mailing lists were an invitation to a conversation but not necessarily an invitation to intimacy. They became somewhat more social with services like Googlegroups and Yahoogroups because then you could exchange files or open up "instant messaging" threads. But the concept was the same.... topic centric as opposed to "friend" centric.
The problem with the old model was that you couldn't easily follow a participant from one conversational thread to another, so it wasn't really a social model at all. It was a learning model, and it was very good at distributing information. Social networks like Facebook are trying to duplicate that informational efficiency with interest-oriented subgroups and with applications.
The early joiners to Facebook were school kids. They met each other in class or on ball fields or in summer camp, and when they changed their physical social environment by going from highschool to college and then to their first job, the relationships multiplied and became a rich social fabric. Facebook and its clones were merely the means by which the social fabric was maintained. That generation of kids is all the better for it. Hurrah for them.
The question I have is whether members of my generation will ever use these social networks in the way our children do. Can they ever become a natural extension of our regular lives, or are we just going to use them to look for love and money in all the wrong places as it were? The social fabric they offer us is too often a thin content-free veil, polluted with spam or even fraud and rarely able to offer a framework for learning or valuable communication.
So what's the answer? As we all know, the most intricate and rich communication environment on the planet is Skype. This will sound horribly grandiose, but I propose that Skype, with its secure, reliable, and seamless integration of text, voice, video, filesharing, screensharing, payments, and more should become the center of new social order on the Internet.
In this Skype utopia, let's have a system where people can join public Skype chats or Skypecasts in order to familiarize themselves with the content and the participants of these public conversations. And lets then allow people to follow a participant from one public conversation to another as a function of getting to know the person before actually becoming his "friend". And lets expand the Skype "profile" to accommodate (optionally) more types of information, more links, and embedded files. If Skype itself won't do that, then let's create a web-based alternative to the Skype profile, one that has all the rich information, plus links into other networks. And let's create gadgets whereby an individual can aggregate all his public skype messaging into an RSS feed, possibly via Twitter.
One man's dream.
What is causing the loss of "lines" by incumbent phone carriers?
Ike Elliott's blog is always a fascinating read, and I am grateful for his regular usage of my "real user" Skype statistics. He has recently been trying to figure out the "line losses" experienced by telephony incumbents (about 9 million in 2007), and he correctly surmises that only a few of the losses are coming from the likes of Skype and Vonage. The following comments will tend to confirm his findings:
As Ike reports, there were 5.9 million "real" skype users added during 2007. Let's try to break it down by territory.
- Europe/Africa/Middle East: 1,973,481
- Americas (North and South): 2,356,786
- Asia & Pacific: 1,511,013
The above numbers are actual measurements and I have a high degree of confidence in their accuracy. However, breaking the numbers down further is basically guesswork. My guess is probably as good as anyone's. In Ike's article he seems to be looking for statistics related to the USA because that is what would compare to Vonage, to the CableCos, and to America's Telecoms. The relevant Skype number would be about 75% of the above America's number, or about 1.77 million. This number is the increase during 2007... the total at year end is about 8 million.
From there, we can continue guessing as to how many of those 1.77 million new USA Skype users dropped their other phone service in 2007. My guess is that it was zero. However, that is beginning to change with the recent onset of high quality Skype WIFI phones that make it a viable choice for some people. Note also that for regulatory reasons, Skype has made no effort to become a phone replacement... in fact it has actually discouraged people from attempting it.
If one is looking for causes of the 9 million "line" decline among the incumbents, look no further than cell phones, broadband, and the demise of the fax machine. Households these days have very little reason to have even one landline, let alone the two or three or more that a household might have needed a few years ago (for voice, fax, modem, and the children who now all have cellphones).
In my view, Skype does present a real threat to the incumbents, but it is not evident in the statistics for "lines". You can see it more readily in the statistics for "long distance minutes", especially international minutes. The incumbents are trying to prevent further erosion with bundled unlimited domestic long distance. In my view, these pricing measures will work only for a short while. Ultimately, the superior economics and superior features of pure P2P VOIP (such as Skype) will totally overwhelm them. It is just a matter of time before they collapse.
New features in Chat Publisher™ (http://glimfeather.com/borderless/chatpublisher.html)
Chat Publisher™ is a free and frictionless mashup between the Web and Skype public chats, enabling chat conversation and related communication to be instantly shared on the Web. The purposes of such a tool are many.
Since its original deployment a month ago, Chat Publisher service has expanded and improved in many ways. The most recent changes include the following:
- Dates are now presented in the local time zone of the viewer rather than the time zone of the bot's server.
- Links to all URLs are now live.
- Certain kinds of URLs are now presented as embedded links. So far, this includes:
- Images (gif, jpg, and png)
- Youtube videos
- Links to chat participants are by default iconified chat links rather than plain call links as they are in Skype. This is done to provide a measure of increased accessibility and yet also a measure of increased privacy. In addition to the default setting, a chat may be configured to have:
- no live links at all
- links as they are in Skype (plain call links)
- iconified call links instead of iconified chat links
- both iconified call links and iconified chat links
- A clearer and more prominent disclosure statement
- Numerous bug fixes.
Internet growth rates? Managing expectations for Skype and others.
Jay Elliott has pointed me to a University of Minnesota study which says that based on an accumulation of measurements, the Internet has grown at a rate of about 50% to 60% per year for the last few years.
In that light, Skype's growth rate does not seem too spectacular. It is keeping up, but not exceeding it by much.
| Growth Rate | Average | 2008 YTD | 2007 | 2006
|
| Skype Real Users/month | 917,763 | 1,403,802 | 486,773 | 862,712
|
| Percent /Year | 61.10% | 61.93% | 27.35% | 94.04%
It sure is better growth than the "old" Internet wannabees and overgrown has-beens that are now battling each other to partner up with Yahoo (Microsoft, Time Warner, News Corp, AOL, etc). Consider Yahoo's top-line growth rate of less than 8% and bottom-line negative growth. Can somebody please tell me why Yahoo is worth more than 50X next year's earnings? Clearly these suitors and collaborators are not involved in a growth strategy but rather a survival strategy.
To put Internet growth in some perspective, Google whose reputation as a powerhouse remains unchallenged is growing at a rate of only 50%... in line with the averages. This has to mean that there are dozens or hundreds of companies out there growing at a rate far exceeding the avearge. The Internet's balance of power is bound to change rapidly in the next few years.
Skype is victim of "wag the dog" sellout rumors on April Fool's Day
Yesterday was April fool's day, but that didn't stop the blogosphere from getting excited about the rumor that eBay was going to sell Skype to Google, then hoping that it might be true and finally convincing each other that it actually is true. It might have been originally reported here, but it was regurgitated in short order here, and here, and here, and here, and the list goes on and on. Without exception, these bloggers all think such a divestiture would be a good thing. I take a contrarian view.
Contrarian View
It is NOT in eBay's interest to give Google or Microsoft or Yahoo another way to attack its core properties in ecommerce (eBay and PayPal). As a part of eBay's Ptingportfolio of assets, Skype is a great bargaining chip to keep its competitors (and partners) honest. eBay would be foolish to sell it to one of them at any price, even the $5-6 billion that some now think it might be worth.
The fact is that Skype is growing fast, is profitable, and is forming partnerships with all the major players in the telephony market. Most importantly, 3 years after eBay bought it Skype's position is ever stronger, and in some respects is now even dominant. The major telecoms and cable companies are truly worried, and well they should be.
Companies that we once thought were in different industries are now playing regularly on each other's turf. This is a good thing. Just consider the Open Handset Alliance and the regulation of wireless spectrum. Google leads or participates in both areas (in partnership with eBay !!), and yet I don't see any of these bloggers complaining that Google should stay away because these ventures are not closely related to its Internet search business. Similarly, Apple doesn't get criticized for dropping "Computer" from its name; Intel doesn't get criticized for buying wireless spectrum; Microsoft and Yahoo don't get criticized for being in the Internet search business, and the cable companies don't get criticized for acting like Telecoms. Only eBay gets criticized for venturing into broadly defined IP services, software, and hardware.
I believe that the blogosphere incorrectly perceives that all these companies are in different businesses. I see them as all in the same business; the information business or what is becoming increasingly known as the IP business. This industry's intense competition and/or cooperation among its players demonstrate clearly how dynamic and undefined the playing field is. Seen in the broader context of IP (information's common carrier), eBay is striving with all sorts of competitors (services, software, and even hardware). We should not be surprised to see eBay invest even more in IP, even if might appear to the blogosphere that its diversifications are unrelated to its ecommerce businesses. Divestiture of Skype at the present time would be foolhardy, and I'll state right here that it's not going to happen.
Skype's unnecessary FCC petition for wireless neutrality is now dead
According to the FCC's Chairman Kevin Martin, the recent auction of wireless spectrum in the 700 Mhz band, which was won by Verizon (and to a lesser extent by AT&T), has opened the wireless spectrum to such an extent that Skype's petition should be dismissed. In February 2007, Skype had petitioned the FCC to apply the standards of the 1968 Carterphone decision to wireless networks, a move that would have opened up the airwaves to "phones" that are not sold by the wireless network's owner.
Martin's reason for dismissing Skype's petition is that in this new swath of 700 mhz spectrum the winning bidders are required to agree (and did agree) to open-access requirements. Verizon and AT&T, to the extent that they decide to develop the spectrum, are therefore expected to allow Skype devices and other VOIP devices to operate freely.
Although the requirement applies only to the 700 mhz spectrum, it appears to have helped the open access movement generally. The Wall Street Journal for example announced this week that the two biggest cable companies (Comcast Corp and Time Warner Cable Inc.) are in talks to provide funding for a new wireless company that would be operated by Sprint Nextel Corp. and Clearwire Corp. utilizing WIMAX technology. Intel and Google are joining the group as well, and each of the contributors are expecting to receive wholesale access to the new wireless network in exchange.
Martin also cited these industry events:
- Verizon Wireless' decision to open its network to any device or application by the end of this year
- Participation in Google Inc.'s Open Handset Alliance by T-Mobile USA and Sprint Nextel Corp., and even eBay, Inc.
Will Skype (owned by eBay) now participate in the wireless IP revolution, or allow wireless communication to be dominated by the cable companies and major Telecoms? Aside from eBay's participation in the Open Handset Alliance and Skype's now foiled petition to open up the wireless spectrum, there is little evidence so far that eBay recognizes the consequences of its potential failure to gain access rights to both 700 mhz and WIMAX networks. Cautious observers however will note that eBay is sitting on a mountain of cash and that it has many more reasons than Skype to participate in development of wireless connectivity; namely Paypal, and eBay's many sales outlets all of which have customers whose future online presence will need a wireless connection.
It is very unlikely that any of the major Internet players will neglect to become a full participant in the development of wireless broadband. The FCC's decision underscores the fact that the entire wireless market, not just the 700 mhz band will be operated under mostly open-access guidelines. That does not mean it will be a free-for-all. My view is that players wishing to connect with their wireless customers will have to become development partners, showing good faith especially in terms of money. More shoes will drop in the months ahead but I doubt very much that eBay, whose Internet properties combined are very large, will fail to be a full participant in the development of wireless broadband.
Skype finishes a record quarter
Skype ended today what will eventually be recorded as its fastest quarter of growth on record. At the quarter's beginning, the IP service provider had 27,206,646 "real users" and by the end there were 31,741,318... a 16.9% bump in just three months. In January, Skype added 2.5 million net new users, followed by 1 million in February and 1 million in March.
If prior years can be used as predictors, things will start to slow down at this point, and probably won't reaccelerate until September. For the full year we are easily on track to hit the 36.5 million real users I had originally forecast... 14 million of which will sometimes be online concurrently (now 12.5 million).
I'll go out on a limb and predict $140 million in revenue for the quarter just ended. That is $4.41 per real user, an increase from $4.23 last quarter. My prediction is quite a bit higher than onlyEbay's prediction of $133 million, but I still think it is conservative.
A ghetto (country) called Skype
Jean Mercier just posted an interesting comment in which he predicts that Skype will soon provide a new system for virtual PSTN numbers that goes well beyond SkypeIN. The new system relates to the 883 prefix which is a virtual "country"... or you might think of it as an international toll-free number, which is further explained at VOIP-News. I agree with Jean, assuming the report is true, that it will have a huge positive impact on number of "real" Skype users and on the volume of Skype "minutes".
It makes much sense to me that this virtual number (883 + 12 or more digits) will be made available to Skyper users and mapped to Skype names. I don't think however that Skype will map the entire Skype cloud to these virtual numbers. It makes more sense for Skype to lease numbers as they are now doing with SkypeIN or via a bundle of extras like SkypePro" where there is a separate fee by the minute for incoming calls. Such a structure would provide a good incentive to tell your caller to get Skype and thereby relieve you of extra charges.
Also, let's remember that virtual numbers are just another way of avoiding the transition to real Skype where there are additional features such as presence, video, IM, file transfer, etc. In other words, a system in which virtual "phone numbers" are mapped to Skype names just illustrates how the ghetto of PSTN is being perpetuated even as vastly superior IP services become available. Similarly, most VOIP carriers continue to be trapped in that ghetto, where voice is the only medium of communication. The word I use for the new world of IP communications is "CKIP", pronounced like "skype" but meaning "Cyber Kinetic IP".
With SkypeIN, Skype-to-go, SkypeOUT, 3 Skypephone, (and the list goes on and on), we are witnessing today the death throes of old telephony. New IP telephony will replace it slowly but surely. Even as these PSTN bridges make Skype more popular in the near term, the end of the PSTN "bridge" era comes more clearly into view.
Comments?
March 27, 2008... More spam attacks in Skype chat
Recently, Skype Journal wrote a controversial piece about how Skype has recently become the target for spam and spim. Other journals have been following up with me-too harangues, and I must agree with them that Skype IM spam/spim is a rapidly growing problem. The following piece is not a rehash of those problems but a description of some potentially even more evil spam attacks in Skype.
I made a decision a long time ago that the feature set of Skype was so unique and attractive that I was going to use it no matter what the risks. As any reader of Borderless Communicator will know, 31 million other "real users" have made the same decision. That's a lot of people who feel comfortable in Skype's integrated online environment, but it doesn't mean that we should be unaware of the hazards that await us.
In the last few weeks I have discovered that the chat interface in Skype is very accommodating to spammers, and I've been a victim of it twice... in two separate but related ways.
The first instance was about two weeks ago. I suddenly noticed that a new public chat group had appeared in my list, and that the ongoing conversation was about issues that hold no interest for me. I wondered how I might have become a member, and initially concluded that it was just one of those "weird" things that happens on the Internet sometimes. I now know that it was nothing that I did myself but rather something that one of my Skype contacts did on my behalf. As a member of a public chat, you have the ability to add anyone on your contact list to the membership of a chat where you are already a member. So there I was in a chat room that made me uncomfortable, and with my profile displayed in all its glory to folks that I probably don't want to ever call my friends. In other words, my online identity had been distributed without my permission and to my detriment by a person a person on my contact list. There was nothing that I could have done about it except to not have trusted my friend's judgement in the first place.
The second instance was just yesterday. As you know, I'm the host of a few public chats myself. One of them functions as a support line for customers of Chat Publisher&trade. See http://chatpublisher.com. Well sometime during the early evening a man (or woman?) joined the chat from Albania. No problem with that so far. That's what the chat is for... to provide a forum for people to ask questions about the service and to receive support, not just from me as its creator, but also from the other members. As it turned out however, this new member had no intention of participating in the chat as I intended, and just a few seconds after he had joined he added about 100 people from his Skype contact list to the chat membership. I was curious and so I took a look at a few profiles. Most of the profiles were blank, which is a strong indication that they're up to no good and have something to hide. But the rest of the profiles provided me with an explanation for this sudden popularity of Chat Publisher&trade. All the new members were from Albania and they were all involved as sex workers. Their purpose was clearly to put themselves in front of a population of potential customers and see who might take the "bait". They didn't have to post into the chat to make themselves a nuisance, or even to read the postings of others. Their mere presence was spam and a breach of the security that I thought I had provided for other participants. It is even worse than that however, for a Skype public chat has a limit of just 150 members. In a matter of seconds, my support line for Chat Publisher&trade was completely disabled by having its membership quota exhausted by people who had no intention of participating in the desired fashion.
So what's the solution to these problems? As I see it, there is an outstanding problem with identity management in Skype. People who spend a lot of their lives online should expect to display their identities in ways and places that suit their private needs, and to not lose control of their identities through the actions of others. I therefore am hoping that Skype will provide an option for me so that I can prevent my contacts from adding me to their chats and conference calls. On the "other side of the coin", where I am the creator and manager of chats and conference calls, I should be able to control the membership. Specifically, I want to control the procedure for joining my chats to be under my control rather than the control of other members. In the case of a private chat, I want the ability to force joiners to ask me to add them directly, if the circumstances of the chat require it. In the case of a public chat, I want to force a joiner to make an independent choice and not be dragged into the chat by their buddy. This back-door to my public chat creates a problem not only for me but also for the security of the chat's existing members. If Skype's developers would just close this back door, then I can set up other ways to authenticate and pre-qualify chat members as members of an existing interest group, and thereby maintain the high standards which the chat members expect.
Comments?
What is Cyber Kinetic IP ?
Cyber- means pertaining to computers, or more specifically "cybernetics" which denotes speech and other functional processes. Kinetic refers to kinetic energy, the motion and acceleration of bodies and processes in space as they relate to each other. "IP" refers to Internet Protocol. Cyber Kinetic IP is therefore an IP service with multi-media communication features, usually with integration of voice (voice over IP or "VOIP"), video, text, and data sharing. These communication forms are combined in varying ways to achieve a result in communication that is more effective and seamless than its component parts.
CKIP however does not mean any grab-bag combination of cyber services in a single package. It does not include older non-IP technologies such as analog voice, fax, paging, and SMS, or aging wireless technologies such as the second generation GPRS, or even third generation UMTS services.
The acronym (CKIP) is thought to be the origin of the word "Skype". This is appropriate because Skype combines in a single IP channel all four types of communication; voice, video, text, and data.
In upcoming blog postings, I'll discuss how Cyber Kinetic IP communication compares to its competition.
March 13, 2008... Announcment: "Chat Publisher™" now available.
Sparked by "Skype Public Chats" and the enormously clever innovation of "persistent" messaging... "Chat Publisher" can help transform working and social communities with more effective, efficient, and interesting conversation.
What follows is a description of "Chat Publisher™" and the reasons for its creation.
The concept behind publishing a Skype public chat is to create a frictionless way for interested persons to make their views known and communicate with both the blog owner and the world at large. The typical process of commenting on web forums today is cumbersome, time-consuming, and prone to error... but joining a public Skype chat is accomplished with just one single click.
Because "Chat Publisher™" draws people into using Skype, it makes available to the blogger's community Skype's rich communication environment that includes group messaging, voice calling, video calling, conferencing, and exchange of data files of all types. This far surpasses the capability of a simple text comment.
In the expected configuration, a person reading a blog article sees the ongoing commentary next to it (an in-frame display window). The same window might also appear on the page containing the permanent article. This accomplishes three things:
- It informs the reader of varying perspectives on the subject at hand,
- It helps the reader decide whether he wants to participate
- It gives the reader some perspective, before actually joining the chat, that enables him to later make an informed comment as opposed to a stupid one.
- It gives a reader having a strong interest in the subject matter a way to be informed about ongoing discussion and about new blog postings as they occur. He can then control his style of notification with his own Skype preferences ("Notify me", "Don't notify me", or "Notify me when these words are mentioned:"
Privacy and anonymity is handled somewhat differently than it would be on the web. Here the participant controls how he displays his identity (name/avatar/mood/presence) and who can contact him (chats and calls) by adjusting his own Skype preferences. To protect the blog's community from spammers, the web page where the ongoing conversation is stored is not indexed by Borderless, and it instructs robots and web crawlers with a "NO INDEX, NO FOLLOW" command. "Chat Publisher™" is available to anybody that "owns" a public Skype chat. It is not for private chats or for "multi-chats" because of their inherent expectation of privacy. At the present time, no other protective steps are being taken to enhance the security of published Skype chats that are, after all, "public" by definition.
In its first iteration and while inevitable bugs are being squashed, Borderless intends to update the published threads of conversation every 15 minutes. Once it appears that "Chat Publisher™" is serving a worthwhile purpose for all concerned, it will be moved to a dedicated machine and updates will happen more often, perhaps every 60 seconds. This move will likely come about within 30 days.
"Chat Publisher™" is a free service. There is no intention of charging a fee for it. It will be supported by placement of ads in a column next to the comments. Borderless will choose "adwords", hopefully with the blog owner's assistance, that reflect both the blog's subject matter and the expected content of the chat conversation.
Signing up for "Chat Publisher™" service requires just a few pieces of information:
- Page Title:
- Heading:
- Heading URL (for your homepage):
- Sub-heading:
- 2nd sub-heading:
- HTML for joining your public chat (get from Skype):
- Words to characterize the content of the expected chat conversation:
Contact garnet_stone via Skype for further details or to sign up for "Chat Publisher™".
March 11, 2008... iPhone SDK raises more questions than it answers.
Well, the battle to get 3rd party applications onto the iPhone is not over yet, especially for VOIP applications. In one specific way, the SDK actually closes the iPhone platform rather than opening it up to innovation. An explanation is in order.
First, let's look at the list of restrictions that the SDK imposes on application development as they pertain to VOIP (from WIRED):
- No VoIP Apps on EDGE - Any VoIP app will only be able to run via a WiFi connection since allowing them on EDGE would effectively destroy AT&T's revenue (and Apple's cut).
- Only Apple Approved Code - The SDK Agreement reads: "an application may not itself install or launch other executable code by any means, including without limitation through the use of a plug-in architectureÉ" Which eliminates Firefox, Thunderbird, MS Office, Photoshop and host of other applications. Of course these apps could be crippled to turn off the plug-in aspects, but that isn't likely to happen.
- No Background Processes - The SDK also mandates that applications must quit when dismissed by the user - in other words there will be no background processes. That eliminates the possibility of a geo-data updater running in the background, reporting your location back to a web service. Ditto for any other "auto-updating" application.
- Applications are sand-boxed - The SDK reads: "an application may write data on a device only to the application's designated container area, except as otherwise specified by Apple." That means apps can't share data and the possibility of cool mashups is basically eliminated.
- Only Official APIs - The last noteworthy (though expected) limitation is that applications "may only use Published APIs in the manner prescribed by Apple," which means all the cool stuff the jailbreak developers have discovered is out the window.
To counter a common misconception, restriction #1 is not an issue at all because VOIP is not going to work on the EDGE network anyway. There is too little bandwidth and too much latency for EDGE to function well for gaming or for VOIP, both of which require bi-directional efficiency and speed. So Apple is well within their rights to keep VOIP off the EDGE network even if it does appear at first glance to be gesture merely to please their partner AT&T.
On the other hand, restriction #3 (no background processes) is very much of a problem for VOIP. It's an odd restriction because VOIP almost by definition depends upon background processes... it needs to log into the network and be prepared to receive calls while the device is involved in other activities. Listening is by definition a background process. There is hardly any point to a VOIP phone that can't listen for inbound traffic.
So why did Steve Jobs declare to the world that VOIP applications were welcome on the iPhone? It makes no sense to me. Here are some possibilities:
- It is all a misunderstanding; the rules that were released don't mean what they appear to mean.
- The SDK's rules are going to change between now and June. Apple has a long history of changing its mind on things, especially on products that are clearly still in beta.
- Apple wants VOIP developers to come to them to negotiate a special deal so as to allow background operation.
- Apple intends to invite only a crippled facsimile of VOIP onto the iPhone, but not VOIP itself. Maybe they want only chat clients, or maybe only outgoing calls. It is inconceivable.
In any case, the picture is very muddy because the SDK's rules appear to directly contradict Apple's public statements. Hopefully some VOIP developer (Skype perhaps) will test the waters with Apple and discover what they really intend. I don't know what it is, but I do know that Apple would be unwise to stop VOIP from coming to iPhone.
March 10, 2008... Finding the magic in "Magic Jack" and other cheap VOIP carriers.
If your objective is saving money on voice calls to and from "landlines" and mobile phones, then you probably have dozens if not hundreds of choices. Anywhere in the world where broadband Internet exists, telephone replacement devices and services have been springing up quickly. If you are willing to shop around, willing to take risks, and are satisfied with just voice communication, then you will probably end up as one of their customers.
At one point Vonage was the leader in this market. Together with Comcast, Time Warner, AT&T, and other "digital phone" services, they represent one segment of the market that today is at the high end of the price spectrum; $300-$500 per year for flat-rate domestic calling together with a "phone number" for inbound calls. The examples I offer are for the USA but there's a similar situation in many countries.
At the opposite end of the price spectrum you find dozens of competitors that will rent you a phone number and allow you to call domestically for as low as $20 per year. As the anti-Skype crowd screams again and again, Skype is NOT the cheapest, costing around $60 per year. Depending on your perspective, the difference annually can seem like a very small $40 or a very large 300%. The choice is often complicated, so hopefully the following explanation will help.
Here's a summary of one of the latest of the new and very clever VOIP services, Magic Jack. It is a tempting offer because Magic Jack bursts onto the scene with a simple and easily understandable device that seems to instantly gratify the desires of someone looking for a cheap telephone replacement. It gives you a "jack" into which you plug a regular RJ11 telephone, and then you plug that right into your computer's USB slot. What could be simpler!! As for pricing, Magic Jack's international rates are very close to Skype's... some are higher and some are lower. But it's the pricing for the basic package that makes it so interesting... $40 for the jack and $20 per year.
So what's the problem? First, Magic Jack is a brand new service and it is highly likely that the $20/year fee is just a teaser rate. Remember that Skype "unlimited" had a cost of $0. for all of 2006. Same situation here; Magic Jack intends, I think, to build up its user base with a dramatically favorable price comparison, and hope that the customer base is large enough to sustain it after investors' money runs out and it has to survive on on its own. Magic Jack looks good but a year from now you may or may not be left with a "jack" that you have to throw away.
More importantly, Magic Jack shares with most or all of the newcomer competition the problem that its feature set is voice only. So when it comes to Skype, comparison is more complex. Their feature sets (Magic Jack vs. Skype) are not comparable in several ways. You could say that they are only as comparable as apples and oranges. Magic Jack is just a telephone replacement whereas Skype is an integrated communications system. Missing features in Magic Jack:
- SMB
- Video calling
- Instant messaging
- File Transfer
- Encryption
- Multiple login
- Conferencing (voice and video)
- Mac OSX and Linux compatibility
- Cleverness getting through firewalls
- Availability for smart phones and mobile WIFI devices
- Basic service (without a phone number) for free
No, Magic Jack is not a Skype killer any more than the other cheap VOIP services. It may well kill Vonage, Comcast and Time Warner because of its pricing, but because Magic Jack's infrastructure requirements are not unlike these other VOIP carriers, its pricing will ultimately rise to their level, or their pricing will fall to the level of Magic Jack's. Price is the only thing that allows these competitors to distinguish themselves from each other. Skype on the other hand is far more than just a VOIP company, and it can distinguish itself on a far greater set of features than just its pricing for voice calls.
Do I hate Magic Jack? No, absolutely not. In fact, I like several things about it. Skype might want to imitate it in these areas:
- Use introductory pricing that is discounted from the regular price (SkypePro and SkypeIN).
- Build a USB/RJ11 device that has Skype pre-installed for people who want to use Skype only for voice calling.
- Allow customers to register their home address, and thereby enable 911 service
- Have a customer support department
Skype may be on iPhone and iPod Touch by the summer of 2008.
I speculated that this was going to happen a week ago, but now it is clearly better than speculation. The new iPhone/iPod SDK has been officially announced, and it will be released to developers in June. There will be nothing in it to prevent Skype, with very little alteration to its core library, from running all its features over the WIFI network that is built into both iPhone and its little brother the iPod Touch. You won't be able to run VOIP/Skype on the iPhone's cellular network, but that was not something that could be done anyway.
Let me say it all again... Apple and AT&T are not going to prevent Skype and other VOIP applications from being installed on the iPhone. In fact, they are going to encourage such developments with $100 Million in seed capital!!!
The SDK is, in my view, going to change forever the course of Skype's development. It is also going to change forever the course of AT&T's development. And as for the future of other cellular companies, and other VOIP companies? Forget it. It's the beginning of the end.
There were lots of other juicy items in the iPhone SDK annoucement, including a big effort to make it acceptable to "enterprise IT". More about that later I hope.
The Internet notes the influence of WIFI devices, especially iPhone.
The iPhone and other WIFI devices are making a "huge difference" in the flow of Internet traffic just as VOIP is making a huge impact in the flow of voice traffic.
Headline: "The Cloud hails iPhone traffic; looks to WIMAX."
Faster than we can possibly imagine, the Internet is escaping our living rooms and offices and making it out onto the street. When "hotspots" first appeared a few years ago I couldn't imagine using one. After all, I thought, my computer is at home and my laptop is so bulky that I hardly want to carry it around with me. That's all changed now. Laptops have become amazingly svelte (eg the "MacAir"), and handheld WIFI devices like iPhones, Blackberries, and smartphones are logging into the hotspots more and more easily... and cost effectively.
When WIMAX and LTE arrive, beginning later this year, it will be quite reasonable for an individual to need, want, and be able to be connected to the Internet 24/7, even as he moves from home to office and from one hotspot to another.
The iPhone has already established a position as a multi-media device that exceeds the capabilities of today's "smart phones", and it is becoming an integral part of "the cloud". One might ask whether independent VOIP (or Skype), if it does not climb aboard the iPhone and/or other competitive integrated devices soon can ever become an essential part of the Internet experience.
To this observer, if Skype moves aggressively onto the iPhone and other integrated wireless (WIFI/WIMAX) devices this year, it will be around for a long time. Skype has a lot to gain, while AT&T and the GSM carriers have a lot to lose.
Demographic Variations in Skype growth
The two most noticeable long-term sub-trends or anomalies in Skype growth, as measured by "concurrent users" are:
- Underperformance of Asian usage in comparison to American and European usage.
- Outperformance of weekend usage in comparison to weekday usage.
| Demographic | 2008 YTD Ann Gr. Rate | Total Growth since 1/1/2005 |
| Europe/MidEast/Africa | 71% | 713% |
| Americas (North/South) | 74% | 760% |
| Asia/Pacific | 77% | 679% |
| Non-Asian Weekdays | 75% | 771% |
| Non-Asian Weekends | 86% | 870% |
The first anomaly may be already correcting itself... Asian growth is fairly strong this year so far. Notwithstanding the nearly two weeks during the Chinese New Year celebrations when Skype usage in the Pacific Rim dropped almost out of sight, growth of Asia's "real users" in 2008 has been unexpectedly strong, reversing the trend of the prior 3 years. "Real users" is a measurement that marks both actual Skype users and their average time logged into Skype. It is too early to tell for sure whether the trend will continue, but this has to be welcome news for Skype... proof that registrations of new Skype names eventually turns into real customers.
The second anomaly is not correcting itself. Here we are essentially looking at the usage of Skype in America and Europe and comparing growth rates during the midday when we expect weekday usage to be weighted far more heavily toward businesses than weekend usage when we expect Skype users will be logged in for mainly personal and recreational purposes. What we see very plainly is that Skype is growing more rapidly as a general communications tool than as a specifically business communications tool. There could be several reason for this, and the measurement technique is not precise enough to know what the truth is:
- One guess is simply that the general market for VOIP is growing faster than the business market.
- Another possibility is that Skype is doing well in both general and business markets, but better in general markets.
- Lastly, it is possible (but not likely) that Skype is actually doing poorly in business markets, and that other VOIP carriers are having more success.
To comment, please join our "public chat"
TOP
|