How Skype Will Grow in 2009

2008 is turning out to be a great year for Skype growth (real users), nearly matching the record year of 2006. In my view, the patterns of Skype growth are affected by: The popularity (name recognition) of the software itself... in comparison to communications alternatives. The capability of computers and mobile communication devices. The quality and capability of the software for multi-modal communication... in comparison to communications alternatives. The state of the world economy The availability of broadband So for 2009 here is how things are shaping up. Skype has no discernible marketing program. It never has. Skype relies almost entirely upon word-of-mouth. If Skype were to introduce a marketing program, the opportunity for growth could be significant. There seems to be zero prospect for such a marketing plan. The power of computers will grow marginally. The capability of mobile devices, especially smartphones, will grow hugely. The latter is a real opportunity for Skype if it can develop quality software for the most popular platforms such as the iPhone, BlackBerry and Nokia N- and E-series. On the other hand, if the world economy sinks, then few people will be buying those new computers and mobile devices. Overall, this is not going to affect 2009 growth significantly.   The overall quality and capability of Skype client software will improve marginally. Aside from bringing out client software for mobile platforms, upcoming improvements in the client (especially video and audio) will affect Skype growth only on the margins. Because Skype/Skype calling is free, and both SkypeIn and SkypeOut are very inexpensive, it is reasonable to assume that a poor economy is good for Skype in terms of its market share of communications. However, the overall market for communications may well decline in a bad economy. So while a declining economy is not good for Skype, it is less bad than for Skype's competitors. The availability of broadband is a very important factor in the growth of Skype's "real users". Summary: Skype growth (as measured by "real users") will continue on its current trajectory (averaging around 830,000 new "real users" per month). That is a huge number by anyone's standard. As in prior years, growth will be strong in the first quarter, slack in the second and third quarters, and strong in the fourth quarter.