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Is Skype’s new paid model an opportunity for FaceTime?

By | January 28, 2011, 10:43am PST

Summary: That slurping sound you hear is FaceTime slowly sucking users from the Skype juggernaut. Does Skype’s announcement of its new premium service mark the beginning of the end?

That slurping sound you hear is FaceTime slowly sucking users from the Skype juggernaut.

Skype is arguably the defacto communication tool for much of the tech community. Heck “Skype me” has become just as much a part of the lexicon as “Google it.”

I’m on Skype pretty much 24/7 and it has all but replaced IM (with some help from Twitter) and in a lot of respects, email too. Skype is especially dominant if you work, live or collaborate outside of the U.S.

But are Skype’s leadership days numbered?

Skype’s announcement of version 5.0 for Mac brought some troubling news with it: Skype is no longer free. But before gathering our torches and pitchforks for a march on Skype’s Luxembourg headquarters, let’s take a look at what’s changed in the Skype business model.

  • Group video calling between 3-10 people is now part of Skype’s Premium Package which costs $5 per day or $9 per month (with a free trial, natch)
  • Skype Premium also includes video tech support (currently in English only).
  • Skype-to-Skype calls, one-to-one video calls, instant messaging and screen sharing remain free.

So while things like IM, chat and person-to-person video calls are still free, Skype is clearly laying down the gauntlet with its premium package. Could this be a sign of things to come? How long until Skype decides to charge for one-to-one video calls, too?

Enter FaceTime, Apple’s video calling sweetheart for iOS and Mac OS. Announced with the iPhone 4 at WWDC 2010, FaceTime allows video calling between iOS and Mac OS devices — much like Skype — and is (theoretically, anyway) based on open standards.

FaceTime Pros:

  • Pre-installed on millions of devices, for a huge installed base
  • You don’t even have to create an account if you have an iTunes account
  • Marketing resources and momentum of the #1 company in tech (with a $50M warchest)

FaceTime Cons:

  • iOS and Mac OS-only (no Android, Windows, Linux, Chrome support at present)
  • WiFi only (although you can enable 3G video calling by jailbreaking and installing My3G)

So what’s holding up FaceTime? Where’s are the Windows and Android clients?

Graphic: iPhone Download Blog

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Topics

Skype Technologies S.A., FaceTime Communications, Communication Tool, Corporate Communications, Productivity, Telecommunications, Marketing, Jason D. O'Grady

Jason O'Grady is a journalist and author specializing in mobile technology. He has published six books on Apple and mobile gadgets and his PowerPage blog has been publishing for over 15 years.

Disclosure

Jason D. O'Grady

Jason D. O'Grady is the creator and editor of O'Grady's PowerPage, which has been publishing mobile technology news since 1995. He maintains an advertising relationship with the following legacy advertisers on the PowerPage:

  • Amazon Associates
  • Google Adsense
  • Tekserve

    • Advertising on the PowerPage is brokered by a third-party agency (BackBeat Media) and he recuses himself from these negotiations.

Biography

Jason D. O'Grady

Jason D. O'Grady developed an affinity for Apple computers after using the original Lisa, and this affinity turned into a bona-fide obsession when he got the original 128 KB Macintosh in 1984.

He started writing one of the first Web sites about Apple (O'Grady's PowerPage) in 1995 and is considered to be one of the fathers of blogging. He has been a frequent speaker at the Macworld Expo conference and a member of the conference faculty. He also co-founded the first dedicated PowerBook User Group (PPUG) in the United States.

After winning a major legal battle with Apple in 2006, he set the precedent that independent journalists are entitled to the same protections under the First Amendment as members of the mainstream media.

O'Grady is the author of The Nexus One Pocket Guide, The Droid Pocket Guide, The Google Phone Pocket Guide, and The Garmin nuvi Pocket Guide (Peachpit Press), the author of Corporations That Changed the World: Apple Inc. (Greenwood Press), and a contributor to The Mac Bible (Peachpit Press). In addition, he has contributed to numerous Mac publications over the years, including MacWEEK, Macworld, and MacPower (Japan).

When he's not writing about Apple for ZDNet at The Apple Core, he enjoys spending time with his family in New Jersey.

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RE: Is Skype's new paid model an opportunity for FaceTime?
liezelee1109 14th Oct
Technology and society or technology and culture refers to cyclical co-dependence, co-influence, co-production of technology and society upon the other (technology upon culture, and vice-versa). - Kyle Thomas Glasser
View in thread
0 Votes
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As Long as Skype remains free (for basic)
bobiroc 28th Jan 2011
I will use that. I can use it on my iPhone, Android, Windows, MacOS, or just about any platform and not have to worry about being limited to the iPhone 4 and MacOS. I think you can even Skype over 3G without Jailbreaking.
0 Votes
+ -
WOW
Hasam1991 28th Jan 2011
You Said I?m on Skype pretty much 24/7?? OK hate to tell you this but you are not a celebrity and you don't even look cool... I wonder what you zdnet folks do most of the time when your not writing articles, yet you need 5 mobile devices and 20 computers...
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
bobiroc 28th Jan 2011
@Hasam1991

What I think he meant by that is that he is signed into Skype most of the time. Not that he is sitting in front of it 24/7.
0 Votes
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You shouldn't even bothered
matricellc 28th Jan 2011
@bobiroc
When people resort to personal attacks and criticisms, it's probably best to just ignore them.
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
alsobannedfromzdnet 28th Jan 2011
50B warchest not 50M.
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
Droid101 28th Jan 2011
Or... just use Google Chat (which includes video) for free, forever, and you (and the other participants) don't have to use an iDevice, you can use ANY device!
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
jorjitop 30th Jan 2011
@Droid101

And make sure that Google can track and record everything you say and do. Say no to Google spyware.
0 Votes
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No.
james347 28th Jan 2011
No.
0 Votes
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Free Skype still has more functionality than Facetime
dazzlingd 29th Jan 2011
Another non story.

More cons for Facetime:
No multiparty conferencing - audio or video PERIOD
No IM
No presence
No telephony breakout (like Skype Out)'
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
surfasb 29th Jan 2011
That slurping sound is actually the BS this blog is sucking in.
When Facetime starts working on at least HALF the devices that exists, then I can see Skype start to shake in their boots.
0 Votes
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A Lack of Engagement With Reality
Doctor Demento 31st Jan 2011
Only an Apple fanatic could think that a universal standard like Skype, which is available for all OS, and all devices from PC's to smart phones is going to be replaced by an Apple standard which runs only on Apple branded equipment
0 Votes
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Concurrent user base? Tracking?
ClearCreek 31st Jan 2011
At the moment, my Skype v5 clients (Mac & Win) show 28,046,657 users online. As we had confirmed for us in a recent outage, this is a distributed network which has now been battle tested. How do Facetime (and Google Chat) compare on that score?

As for tracking, do we all suppose Skype and Apple aren't just as interested in tracking our online presence as Google is? Google may be better at it, but they are by no means the only ones... The solution for this is probably legislative, since only the EU has the market power and "balls" to bring these kinds of companies to the floor.
0 Votes
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RE: Is Skype's new paid model an opportunity for FaceTime?
jackson1984-24316069205748857739440257893812 11th Oct
Howdy,The mulberry alexa strategy with the site may be very match to me, I really hope alot much more alternate with you this Motive.
0 Votes
+ -
RE: Is Skype's new paid model an opportunity for FaceTime?
liezelee1109 14th Oct
Technology and society or technology and culture refers to cyclical co-dependence, co-influence, co-production of technology and society upon the other (technology upon culture, and vice-versa). - Kyle Thomas Glasser

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