Google today announced they are going to offer free voice calling for users of gMail. Some media outlets have said this poses a significant threat to Skype. I’ll confess that was my immediate thought but on reflection I think the news may actually be far worse for carriers such as AT&T. What Google has done is validate that the concept of free/almost free calling using the Internet is the way forward. To use their service you need a gMail account. If you already have an email account from say Yahoo! or Hotmail, then you can of course open a gMail account or simply use Skype… Given the way Skype works, I can’t see people necessarily switching to using the Google service. What I can see is some people who still use land lines giving the Google service a try. I can also see that having competing services from Skype and Google will really a) improve these products and b) force traditional carriers to look at their pricing. In other words, the people who will likely feel the most pain are the AT&Ts of this world who will inevitably end up having to make drastic cuts to their rates.
As the media speculated about the launch of the iPhone 4 there was a lot of chatter about them also launching a Verizon version of the new phone. Rationally this was never on the cards for a few simple reasons:
1. AT&T has really struggled to provide reliable service in two major metros (New York and San Francisco). If Apple had opened the door to Verizon, customers would have fled from AT&T at an alarming rate. I’m pretty sure AT&T knows this and will have been negotiating with Apple to keep the exclusive arrangement until its coverage issues are resolved. According to Mr Jobs that should be by late summer if his answer at D8 is to be believed.
2. The Verizon version of the phone uses different technology. One presumes that the engineers at Apple will want to get the version they know working before they introduce an alternative.
3. Apple actually likes the single supplier deal it has with AT&T. Apple never went down the clone route because it loves to control as much as it can. Having multiple carriers isn’t something Apple wants as it gives them more risk. Apple signed up single carriers in lots of other markets – eg O2 in the UK. They’d prefer to stay single carrier as long as they can. Multiple carriers makes life more complicated and unless they need to do it, they won’t.
Don’t get me wrong, at some point Apple will let other carriers in, not many but some. But right now it is no hurry. It can sell all the iPhones 4s it can build. Pre-orders on eBay are already going for over $1000. If they open up now they will simply have two channels they can’t fill. They are much better waiting ’till the buzz has died down around the 4 and then introducing it on Verizon. My guess is late this year…