Nokia - Skype: Jinxed as partners?

The MWC (Mobile world Congress) was a spectacle this year as well (as every year!). The Mobile world had a sneak peek into New Technologies, new devices, new services and new partnerships happening around.

One of the most promising partnerships annpounced was that of Nokia and Skype.According to this partnerships, Nokia would integrate the Skype VoIP software with its N Series flagship N 97 on the S 60 platform for its consumers in Q3,2009. This would enable consumers to sync their phone address book with their Skype contacts and make calls over VoIP to them. A computer call would be free and users will pay Skype for voice calls to Cell phones or landlines. Skype as an application is free for download to cell phones. However it would require a 3G service or a Wi Fi zone to allow this service better.

This is a classic case of convergence media being offered to consumers (who now have a choice of making a call through their cellular operator as well as VoIP). Skype is the biggest beneficiary of this partnership as it piggy backs Nokia's reach in geographies where the lap top will take some more time to estanblish itself. Thus Skype, Internet and VoIP will leap frog emergence of lap tops to tap into the VoIP technology.

However there is an unexpected backlash from UK operators, O2 and Orange who obviously view this partnership and the technology ofered being disruptive in nature. The sources cited state that the partnership of Nokia and Skype would wrest away control of their consumers by offering easy access to an application that could hurt their call revenues.

To quote verbatim:

Mobiletoday.co.uk’s source said to them that this was yet “another example of [Nokia] trying to build an ecosystem that is all about Nokia and reduces the operator to a dumb pipe…But if you spend upwards of £40 million per year building your brand, you don’t want to be just a dumb pipe do you?” The source added, “Nokia have tried several ways to own the customer over the years and operators have had to say no.”

The adjectives to describe the operator outrage are "furious" and "venting their anger" amongst others. Operators have also stated that they wouldnot stock up Nokia devices if Nokia doesnot strip the application. Thus we have an interesting situation out here, since Nokia wouldnot want to walk back on its MWC partnership with Skype for fear of a loss of face. However inability to do so, may jinx the N 97, a device where Nokia is betting a lot to fight back on the smartphone platform. It doesnot have a US carrier for N 97. Not having a UK carrier could be worse for them. It needs the operators to subsidize the N 97 for the smartphone users. We may see Nokia walking back on the Skype partnership after all, at the end of it.

PS: One would remember Nokia's earlier attempts at trying to have a eco system of consumers all for itself without sharing it with its eco systems partners. An earlier example was the Comes with Music service which it started short circuiting the operators (who also saw this as a competition to their own music stores).