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Skype Hooks Up with RadioShack

Posted by iTech - 2005-11-24

Internet phone service provider Skype has hooked up with retailer RadioShack in a deal that will put Skype hardware and software in thousands of RadioShack stores and boost the profile of an emerging VoIP market.

Among the equipment to be offered at some 3,500 RadioShack outlets is an Internet calling kit consisting of a Bluetooth-enabled wireless headset and USB adapter from Motorola, a Linksys cordless Internet telephony kit, and other equipment to support the Skype service.

The Skype Starter Pack, priced at $4.99 for a limited time, includes VoIP software, a headset, and 30 minutes of online calling.

Removing Barriers to Adoption

Skype currently boasts 66 million subscribers worldwide, with some 175,000 new accounts added daily. The RadioShack pact is the company's first attempt to draw interest through a major retailer.

"This helps remove the barriers to adoption of a relatively new technology," said IDC analyst Will Stofega. "Skype is providing a hardware and software package that makes it easy for people to get started with VoIP."

Stofega noted that VoIP provider Vonage has similar arrangements with Best Buy, Staples, and Amazon, among others, while Skype has sold its service at kiosks in Japan and other areas.

Stofega said RadioShack is a sensible choice in that it typically draws tech-savvy consumers and has staff that can help educate buyers. "I expect that Skype will add more big retail partners in the future to increase their footprint," he said.

High Hopes

It's been a busy year for Skype, which this fall was acquired by eBay for $2.6 billion. The price was determined in part by Skype's projected revenue, which the company predicted would grow to $200 million in 2006. The buyout agreement also came about as a way for eBay to add more real-time services to its auction technology, although eBay has not yet integrated Skype services into its site.

Shortly after the deal's announcement, Skype garnered headlines when China Telecom announced it would block calls made from China with Skype. Although computer-to-computer calls were unaffected, customers in China were stopped from using the service to call standard telephones.

After Skype was acquired by eBay, research firm Gartner noted that the deal likely would improve the outlook for a business-class version of Skype's VoIP product and take the company head to head against larger VoIP players like Vonage.

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