Skype Debuts on the iPhone

Using a Wi-Fi connection, people can now make cheap international calls with Apple’s gadget.

The Internet phone service Skype already offers a way to make free or inexpensive calls to anywhere in the world via an Internet connection. Today, the Luxembourg-based company behind Skype releases an application that runs on Apple’s iPhone and iPod Touch over a Wi-Fi connection.

Long distance: A screenshot of the new Skype iPhone app. The software can be used to call Skype contacts as well as regular phones.

The service is already available on some Nokia phones and those running Windows Mobile or Google’s Android. But its emergence on Apple gadgets is significant. According to one recent industry report, the iPhone is responsible for 50 percent of all mobile traffic in the U.S.

Skype isn’t the only Voice-over-Internet Protocol (VoIP) application available on the iPhone–Truphone, Fring, and Nimbuzz are other examples. But these apps do not offer as many features as Skype or access to Skype’s network of more than 400 million users worldwide.

As with other VoIP applications, Apple will limit use of Skype to Wi-Fi networks and will not allow Skype data to travel over the cellular network, which is operated by AT&T in the U.S. This will help shield AT&T’s voice-minutes and text-messaging revenue. Furthermore, with the current state of Wi-Fi coverage, it’s unlikely that VoIP will provide a true alternative to cellular voice plans.

AT&T would not comment on the Skype application specifically nor on mobile VoIP in general. But some cellular providers have been more proactive about protecting their voice revenue. T-Mobile USA, for one, has modified handsets so that they can identify calls made using VoIP software and WiFi connections. It then charges these calls against a subscriber’s wireless minutes unless he or she has signed up for an additional plan that costs $10 a month.

In the future, a technology called deep-packet inspection could play a role in moderating how successful VoIP on mobile devices ultimately is, says David Chamberlain, analyst for research firm In-Stat, who is based in Arizona. “If mobile operators decided that there is too much traffic on their network and they see a packet they don’t like, then they can reshape the traffic,” so that certain packets are reprioritized. This way, Chamberlain says, voice traffic sent over the data network could be prioritized and slowed down en route, which would degrade the quality of the call. If Skype proves too popular, he speculates that service providers might be forced to take this route.

Chamberlain also suggests that mobile-phone carriers could actually benefit from customers using Skype. “It only works over Wi-Fi, and that’s a good thing,” he says. “If you’ve got a device that you want to use indoors, then the operator doesn’t have to build a network that works there.” This is especially relevant for all those people whose cell-phone service drops off inside their homes. Instead of the cellular providers rushing to improve the signal coverage by adding more towers, says Chamberlain, they could just let the users supply and pay for their own Wi-Fi network to use VoIP.

A quick test of the Skype iPhone application shows the call quality to be similar to that achieved using a laptop computer. It is easy to log on, and contacts are immediately loaded on the screen.

As with the regular service, calling a non-Skype number within the U.S.–including another cell phone–costs two cents per minute. Calls received using Skype will reach a computer or iPhone simultaneously, but in order for the iPhone to ring, the application must be open and running.

While the phone quality is good as long as the Wi-Fi signal is strong, there are a number of drawbacks to using Skype on the iPhone. First, prolonged use of the Wi-Fi radio tends to suck battery power, so a Skype call will drain the battery faster than a cellular one. Second, the phone-within-a-phone experience is unintuitive and may be confusing to some users. Ideally, Skype would run in the background and incoming calls from Skype or the cellular network would look the same. (The next upgrade of iPhone software may allow Skype calls to be pushed through even when the application isn’t actively running). And third, the iPhone application doesn’t have all the features that the desktop version of Skype does, like text messaging and video chat. The position of the iPhone’s camera, on the opposite side of the screen, makes two-way video chatting unfeasible.

Skype for the iPhone and iPod Touch is free, although the iPod requires a microphone add-on. In May, Skype plans to release an application for the BlackBerry as well.

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