Skype is worried about whether the iPhone
and other Apple products will undermine its VoIP services and is also
insecure about whether it can achieve service levels good enough to lure
business customers, according to the company's filing with the U.S. Securities and Exchange Commission in preparation to offering public stock for the first time.
Pros and cons of Skype IPO
"For
example," Skype says in the SEC filing, "although our application for
the Apple iPad, iPhone and iTouch is currently enabled to make voice
communications over 3G networks, Apple or its carrier partners may
choose to alter the terms
of inclusion in its application store, effectively withdrawing this
functionality at any time or develop competing applications, such as
Apple Face Time, that may better integrate with Apple's devices."
See also: Skype's SEC filing reveals huge revenue swings
This
concern could be extended to Android or other smartphones for which
third-party software is available. "Application store owners have
ultimate control over the products and services made available through
their channels and may choose to remove Skype from their stores or
restrict functionality based on perceived competitive threat or
cannibalization of their own products," Skype says.
Similarly,
despite its current relationship with Verizon to sell Skype services,
such relationships with carriers could become difficult if Skype is
perceived as a competitive threat. "Our business strategy depends on our
ability to continue to offer our products on a mobile platform. Mobile
network operators may be reluctant to partner with us or allow our
products to be used on their devices due to concerns about cannibalizing
their business. We have already faced such reluctance by mobile network
operators, particularly in European markets, in relation to VoIP and
peer-to-peer applications generally," the filing says.
Skype's
strategy also includes expanding products for businesses, but is
concerned that its historically inconsistent support might keep
customers away. "Business customers have different needs and often have
more demanding expectations than consumers, and we will likely need to
add product features and provide more consistent quality, among other
things, in order to attract business customers," Skype says. "Although
we have recently enhanced our capabilities in this area, these
enhancements may not be sufficient to meet business customer
expectations."
It may prove too costly to come up to snuff for businesses, Skype says, to make it possible to recover those costs.
Skype
also worries that more established service providers have customer
loyalty as well as broader service offerings that may make Skype a
less-attractive alternative. "In addition, many business vendors offer
unified communication systems that include products we do not offer,
such as email. These vendors also are recognized brands in the business
marketplace and have incumbent status, including, in certain cases,
long-term customer contracts, and as a result, it may be difficult for
us to replace them," Skype says.
Plus, IT staff that support these
services may be comfortable with services they are already receiving,
and may be reluctant to change. "If we are unable to successfully
develop and market products to business customers, our results of
operations may suffer," the company says.
A wild card tossed into
Skype's growth plans is the role that third-party application developers
may or may not play. "Our strategy contemplates attracting third-party
developers and other companies to use our application programming
interfaces to extend our platform; however, this is a recent initiative
for us and we may not be able to attract developers and other companies
interested in developing applications for our platform," the FCC filing
says.