Line and WhatsApp gun for Skype with voice calling features
Line, a mobile messaging platform-maker, today announced that it plans to create a Skype-like calling service to complement its existing products. The voice service will connect to the company's messaging platform and, in a deviation from Line's consumer focus, also cater to businesses by connecting to customer relationship management and marketing channels.
Such announcements have become a trend of late. WhatsApp, a competitive service recently acquired by Facebook, announced Monday that it also plans to release voice calling features. These messaging services are no longer focused only on dethroning Facebook -- they're also looking to defenestrate Skype, the long-unchallenged leader in Internet-enabled voice calls. If successful, they'd make last year's hype darling Snapchat look like the cute toy of the mobile comms market.
This is a notable shift from just three years ago, when Skype acquired the GroupMe messaging service to bolster its presence in the nascent mobile messaging market. The company hoped to use its platform, which had 170 million users at the time, and GroupMe's popularity to lead mobile communications the same way it's led Internet-enabled voice calls for the last decade.
That hasn't happened. GroupMe exited the hype cycle, floundered in the bureaucracy endemic to large companies like Skype, and lost its founders in September 2013. Skype had correctly identified the speed with which mobile messaging would grow, but its attempt to capitalize on that growth has largely failed -- and now the companies that succeeded are gunning for it.
Skype isn't sitting idly on its throne, however. The company recently announced that it has fixed many of the problems plaguing the mobile versions of its chat service, which have been installed by hundreds of millions of iPhone and Android smartphone owners. It also said in a June 2013 blog post that it is committed to changing with the post-smartphone times:
Skype was founded under the simple principle that “the whole world can talk for free,” and I’m not sure any of us could have imagined the remarkable effect this would have had in our daily lives. From millions of young families sharing their weekly video call with proud grandparents, to connecting students around the world with Skype in the Classroom, to bringing families together of all kinds – Skype has become a fundamental part of how the world communicates.
That said, when you ask people “What’s Skype?”, pretty often the answer you’ll get is “it’s a free video calling app for your PC or Mac.” We love that; that got us to where we are today. But, as we all know, the world has changed. People’s computers are just as much in their pockets as on their desks, and Skype has grown up right along with this increasingly mobile world. Inertia has proved to be stronger on the Web than experts originally expected in the late 19990s when they feared that competition for news, information, or shopping was only a click away, unlike the physical world. The fact that Yahoo and AOL are still multi-billion companies-- and that anyone goes to Ask.com-- is testament to that. And Skype has a far stickier lock in as a core reliable messaging utility for billions of people. It's not a fun social way to share photos. It's how you call your loved ones from overseas. Line and Whatsapp's best hope may be signing up the next generation of mobile-first consumers-- in other words, going after Skype's growth not its base.
In any case, aspirational blog posts don't beget success better than a growing user base, a prolonged stay in the hype cycle, and the backing of companies desperate to own digital communication. Skype has hundreds of millions of users, but WhatsApp has more; it's a familiar service, but hasn't enjoyed the same press that mobile messaging services have in recent months; and Microsoft isn't nearly as desperate to control communication as Facebook, Google, or telecom operators like SoftBank, all of which have increased their efforts to control mobile messaging.
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Bloomberg Businessweek reports on Line's popularity in Asia and South America, where it competes with incumbents like Facebook Messenger and -- you guessed it -- Skype:
Line is the No. 1 mobile messenger service in Japan, Taiwan and Thailand -- ahead of Facebook Messenger in all three countries, according to a Feb. 20 report from Samsung Securities Co. citing data from researcher App Annie Ltd. Line also ranks highly in Chile and Mexico, where it competes with Microsoft Corp.’s Skype, and in South Korea where it competes with KakaoTalk.The New York Times notes that the addition of voice calling features to services like Line or WhatsApp bring the companies into direct competition with Skype and traditional operators:
By expanding into voice, WhatsApp is going head-to-head with the likes of Skype and traditional cellphone operators like AT&T and Deutsche Telekom. Analysts say the move also could lead Facebook to revamp its own mobile offerings, which have centered on software called Home that has won few fans since launching last year.Tech In Asia writes that Line and WhatsApp aren't alone in their voice calling ambitions, and that this should worry Skype:
Line’s move into sexy-app-to-old-fashioned-phone calls places it alongside Viber, which introduced a similar feature back in December. Of course, the first company to introduce the technology to the masses was Skype, the old-faithful of OTT communication apps. As long as this feature continues to make its way onto mobile messaging apps, which tend to have extremely strong stickiness, Skype might find its loyal users abandoning it in droves.Pando weighs in
Pando alum Erin Griffith wrote about GroupMe's journey from startup darling to me-too messaging service in October 2013. In the report, GroupMe's founders claim that the service's low user count isn't really a big deal:
Even combined with Skype’s 250 million monthly users, GroupMe’s four million monthly active users is a far cry from the billion users Martocci promised after the sale. It’s also a far cry from the hundreds of millions that WhatsApp, Line and WeChat have.
The GroupMe founders are quick to point out that these other services don’t focus on groups, an area which GroupMe dominates. “We are for groups, that is our fundamental distinction,” Hecht says. “That has been enough of a distinction, and that will persist. I don’t think we’re going up against the others because we didn’t ever have one-to-one messaging.” [Image adapted from Bentom Wyemji]