Why Microsoft needs Skype: Windows Phone 7

Video chat, voice and telephony leverage, enterprise communications: Skype brings it all

So we’re still mere hours into the post-apocalyptic world where Skype has been acquired, not by Google nor Facebook, as was rumored, but by the tech company that could be their grandparent: Microsoft. And the deal didn’t go for a measly $4 billion, but for $8.5 billion in cash.

While speculating endlessly about how Google would use Skype to bolster Google Voice or how Facebook would integrate our social networks into the ultimate communications machine, everyone forgot about a little mobile platform called Windows Phone 7.

Just released last fall, the new smartphone platform trails Android, RIM and Apple in terms of market share, but not really in terms of usability. Still, it’s generally accepted to be Microsoft’s best mobile offering yet.

It does lack in one area, however: video chat. While Apple already offers FaceTime standard on iPhone 4 devices and Google is working on rolling out video chat to Android via Google Talk, Microsoft has no analog. As Skype has been known to be developing its mobile video capabilities recently, this acquisition will help Windows Phone 7 get video chat sooner than later.

Furthermore, while Microsoft has already said it will continue development of Skype on all platforms, there is little doubt that this gives the company leverage to focus development of the app on Windows platforms. Heavy Skype users shopping for a new phone will find it very interesting that the Windows device has such-and-such extra features, while iPhone and Android devices don’t.

Finally, while it’s not nearly as sexy as other reasons listed, Microsoft’s purchase of Skype serves as a reminder that Windows has always been as much about the enterprise as it is for consumers. Though cloud productivity solutions like Google Apps have threatened Microsoft’s dominance in that area, no one can doubt that Skype is one of the most-used communication tools for business professionals. It will fit in nicely alongside Microsoft’s other professional suites.

The mobile Microsoft OS, with a 7.5 percent share of smartphone subscribers, has quite a ways to go before catching up with Android (34.7 percent), RIM (27.1 percent) and Apple (25.5 percent) (source: comScore). That said, each of the market leaders had a head-start on Microsoft. The first Android device came out in September 2008, the first iPhone in June 2007 and the first BlackBerry way back in 2002. Windows Phone 7 just came out last fall.

(If you want to tell me that Windows Mobile has been around for over a decade, please don’t. I’m arguing that Windows Phone 7 is the first smartphone OS from Microsoft that any consumers and businesses are taking seriously. And they're proving it with their wallets.)

What’s essential to note is that ranking in the mobile industry is far from cemented. It’s a fierce market out there, as Android has proven by so rapidly rising to the top and as the former champion, BlackBerry, has too proven by dwindling and dwindling every quarter. That’s why I don’t so much as blink when I see a report that predicts Windows will hit a 17.2 percent market share in 2016, just a step behind Apple’s 17.5 percent forecasted share.

But then, that’s just more speculation.

For now, we have to find all our answers in this small blurb:

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

Doesn't say a whole lot, does it?