Wal-Mart to Carry Skype Product (Land)Line
One of the constant complaints about Wal-Mart is that its size and market power allow it tremendous leverage over its suppliers- and not just small ones. Even large firms have been known to complain that the behemoth of Bentonville has extracted economic concessions from them under extreme duress. True as this may be, there is a positive side to the story that rarely gets as much. That would be those instances where Wal-Mart starts to carry products and services that, for any number of reasons, have far less market penetration than they could or should. Today's announcement that Wal-Mart will now carry the Skype product line is a case in point:
Skype, the leading Internet communications company, today announced that it is teaming up with Wal-Mart, the world's largest retailer, to address the growing popularity and demand for Internet communications among U.S. consumers. Starting today, Wal-Mart is offering Skype Certified(TM) hardware in the Internet and voice communications area of 1,800 of its stores throughout the country, providing more opportunity and accessibility for people looking for affordable calling options. This partnership gives shoppers immediate hands-on access to headsets, webcams and handsets designed to work with Skype, as well as the first pre-paid cards for Skype available in the U.S.he addition of Skype Internet communications products to Wal-Mart stores comes at a time when Voice over Internet Protocol (VoIP) adoption among U.S. households is growing rapidly. According to the Telecommunications Industry Association, 9.9% of all landlines in the U.S. were VoIP lines in 2006, and this will rise to 34.1% by 2010. In addition, Skype is the number one software-based VoIP application in the U.S. by market share, according to a March 2007 report by In-Stat.
"We applaud Wal-Mart for recognizing the popularity of Skype and making it more accessible to Wal-Mart shoppers. This relationship with Wal-Mart will increase exposure for Skype and our hardware partners in a single dedicated Internet communications section," said Don Albert, vice president and general manager of Skype North America. "Our research suggests that when users add a Skype Certified accessory like a headset, handset or webcam, it greatly enhances their experience and they use Skype more to connect with family, friends and business colleagues."
Commentary
I agree with the author's basic premise that "the Wal-Mart pact" should help increase Skype's subscriber base. As wonderful and widely-used as the service is, many people don't know what Skype is. With its products being sold in 1800 Wal-Mart's nationwide, millions of people will soon discover. That said, the last statement about relationship between Skype-certified accessories and the level of usage warrants scrutiny, particularly as it pertains to the direction of the causal arrow and the ultimate impact on profits.
It may be the case, as Skype suggests, that having a handset, headset, or webcam both improves user experience and increases Skype usage. Or it may be the case that people who are already inclined to frequently use Skype or other VoIP applications are also more likely to buy and make best use the aforementioned accessories. My guess is that the first and most frequent buyers of Skype products at Wal-Mart will be people that already know and like the service.
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wal-mart