Barcelona — Internet calling company Skype is busy forging up alliances with Nokia, the world’s largest mobile handset manufacturer for developing a VoIP (Voice over Internet Protocol) software to be pre-installed for the cell phone maker’s top-of-the-range N97 smartphone, executives of both companies said Tuesday at Mobile World Congress 2009, in Barcelona.
Nokia’s N97, which the company yesterday demonstrated to be released in June, will be the flagship Skype-enabled N-series device. The N97’s address book will incorporate Skype contacts and enable presence for both voice and instant message chats when the device is connected to a 3G signal or Wi-Fi. The Skype feature will start shipping on the device in the third quarter of 2009.
Skype, whose technology has empowered legions of consumers around the globe to make practically free long-distance calls over the Internet on fixed lines, has been moving into the mobile arena with deals with operators such as Hutchison Whampoa’s 3.
“We believe that mobile is incredibly important to our future,” Skype Chief Executive Josh Silverman stated in an interview to Reuters at the Mobile World Congress in Barcelona, the industry’s biggest gathering.
He said Nokia would pre-install Skype in its high-end N-series phones, starting with the N-97. “The Nokia announcement is really a major milestone. When we partner with manufacturers we are able to deliver a superior experience,” Silverman said.
The Skype application will be integrated into the phone’s address book, making it as easy to place a call to a contact’s Skype username as to their regular phone number, said Skype Chief Operating Officer Scott Durchslag.
Additionally, N97 users will be able to make free and low-cost phone calls over the Internet whether they are on a 3G cellular network or a Wi-Fi network. The Skype-to-Skype voice calls are free. And the SkypeOut service, which allows calls from Skype to landlines and mobile devices, offers low rates.
The Skype application will also enable users to send instant messages and also make it possible to select it as a widget so they can see which of their friends are online, all the time, said Jose-Luis Martinez, Nokia’s Vice President for Nseries phones. It will use Wi-Fi or cellular connections, as available.
The N97 works on Nokia’s S60 software platform, but the application under development is specific to the N97 and will not initially be available for other S60 phones, Durchslag said.
Skype is still working on designing the user interface, and the application code has not been written, said Durchslag. He hopes to have something ready to demonstrate by June, with the final application ready for release some time in the third quarter.
Surprisingly, Nokia is not the only cell phone maker to announce a deal with Skype at Mobile World Congress. On Monday, Sony Ericsson announced it would be offering a Skype “panel” on the Windows Mobile Xperia1 device.
Integrating Skype in to smartphones offers a great advantage for consumers, especially for people who travel internationally or have friends and family overseas. While pricing on domestic voice services has been dropping like a brick from a third-story window, international rates have remained high.
Skype and other VoIP service providers offer users a more economical alternative. And Skype on a mobile phone, when accessed on a low-cost data network, could help people who travel frequently or make lots of international calls save tons of money.
Nevertheless, most mobile operators are wary of Skype, concerned that they might lose revenue through consumers paying little or nothing for calls, but Silverman said 3 had actually seen its average revenue rise by 20 percent for consumers using Skype phones.
He said subscribers were pleased to use their phones more by flat-rate data plans — boosting usage of 3’s other services — and that customer loyalty increased.
Silverman added that more than 300 million minutes’ worth of Skype to Skype mobile calls had been made so far, with current rates at about 1 million minutes per day. Skype had 405 million registered users in total at the end of last year.
In addition to Windows Mobile version, the forthcoming N97 application and the dedicated Skype phones, Skype debuted the Skype Lite client for Android at CES this year, which brought the open source operating system into the ranks of the over 100 Java-enabled mobile phones from LG, Motorola, Nokia, Samsung and Sony Ericsson.
Here is a video demonstration of Skype Lite on Android’s features:
Skype was acquired by online marketplace eBay for $4.3 billion in 2005 with the aim of bolstering its PayPal online payments service but it took a $1.4 billion writedown in 2007 and there have been media reports that eBay may sell Skype.
Silverman declined to comment on the speculation. “eBay is very supportive. We are very happy with the support we get,” he said. “I spend 100 percent of my time building the world’s best communications company.”