Skype Moves Into Retail

By Greg Scoblete -- TWICE, 11/21/2005

Fort Worth, Texas — The free VoIP service Skype entered retail today, announcing a deal with RadioShack to distribute several Skype-enabled telephony products.

The products will include the new Motorola H500 Bluetooth headset and PC850 USB adapter bundled in an “Internet Calling Kit.” The kit will be available exclusively at RadioShack for a limited time for a suggested price of $99.99.

The retailer will also carry the recently introduced Linksys CIT200 Skype-enabled Cordless Internet Telephony Kit for a suggested $129.99, after a limited time $15 mail-in rebate; the Logitech Premium USB Headset 250, suggested $39.99; the Voice VoIP Cyberphone K USB Internet phone, suggested $39.99, and a Skype Starter Pack, priced at $4.99 until Dec. 24. The starter pack includes the Skype software, headset and 30 SkypeOut minutes to call any number anywhere in the world

Skype, which was purchased by online auction site eBay, will be ambitious in its retail strategy, said Saul Klein, marketing VP. The company will have a “Skype Corner” in 3,000 RadioShacks to promote its service.

Skype differs from other off the shelf VoIP services like Vonage in that it requires a PC to be on at all times to place a phone call. As such, it is not a “primary line” replacement as it cannot offer emergency dialing or traditional phone numbers.

The service is free when one Skype users calls other Skype users. The company also offers a SkypeOut pay service for placing calls from Skype to non-Skype users and a SkypeIn service that gives the user a phone number accessible to non-Skype callers.

Since there are typically no monthly fees associated with the service, Skype will not necessarily be offering activations or residuals to give incentive to retailers. Instead, Klein argued that Skype’s vast user base of 66 million registered users worldwide and 5 million registered users in the United States constitute an enormous potential hardware market.

“We add about a Vonage a month” in terms of customer acquisition, Klein added.