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Skype faces trouble on both desktop and iPhone

Published May 23rd, 2013 3:50PM EDT
Skype Market Share

It’s no surprise that AIM and Yahoo Messenger are collapsing, with unique visitor counts declining by about 30-40% year on year, according to comScore. But it is fascinating that Skype (-12%) and Google Talk (-15%) are now losing ground now. There is no doubt that Facebook’s messaging system is one major factor in the desktop messaging decline. Yet it’s hard to avoid the notion that the rapidly multiplying messaging apps on smartphones are the biggest headache for Skype right now.

Onavo’s engagement data also shows Skype stalling when smartphone usage is measured. The share of iPhone users actively engaging with the Skype app slid from 16.7% to 16.5% in five months. In contrast, the WhatsApp engagement moved up from 7.6% to 8.9% over the same time frame. Viber inched up from 4.6% to 5.2% and Kik jumped from 3.7% to 4.7%. This shows that consumers are willing to go beyond Apple’s own messaging system in order to gain access to cross-platform messaging on iPhone. They just don’t see Skype as a very compelling option right now.

It will be fascinating to see what the Skype integration in Microsoft’s upcoming Xbox One console is going to do to drive consumer engagement. Based on comScore and Onavo numbers, Skype is in a bit of a bind right now, losing desktop traffic and failing to keep up with the growth of nimble smartphone rivals.

Skype is a bit of a dinosaur. It was founded all the way back in 2003. Whippersnappers like Kik now gnawing at its ankles are just a couple of years old. It could be that Skype’s early focus on VoIP is a problem here; IP-based messaging has turned out to be more popular than IP-based voice services. Of course Skype offers texting and photo-sharing, but its images has been built on the VoIP aspect of the service.

This could be the right time for grandpa to learn some new tricks about baby sloth GIFs and social puzzle games.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.