The anticipated launch of Skype for the iPhone has been confirmed. The NY Times and CNET cover the story. CNET got a sneek peek at the app and has a detailed dicussion of its features, as well as screens:
Skype's screens are well organized and use the iPhone's ability to add filters, for instance, to sort your contacts alphabetically, or by who's online. There's chatting as well, though Skype's flagship feature is its VoIP calling that's free to other Skype users and an inexpensive per-minute fee to landlines. Calls on Skype for iPhone work only if you're in range of a Wi-Fi network, so your call quality will in part be at the mercy and strength of wireless networks nearby--calls will not work over the cell phone network on the iPhone (but chatting will.)
Apparently in the US VoIP will only work over a WiFi connection and won't be able to be used on AT&T's 3G or edge data network, though IM will work over the data network.
Here's the interesting part of the NY Times' article about whether Skype competes with carrier voice plans:
Skype tested its service in London in the last two years with Hutchison 3, a British mobile network. It said it drew more customers to Hutchison 3 and increased its revenue for each user, since people were making calls on their cellphones using Skype that high calling rates would have discouraged otherwise.
Scott Durchslag, Skype’s chief operating officer, said he did not think the limitations on using Skype on the iPhone would be a big drawback for users, since Wi-Fi networks have become common.
The point about users making calls they wouldn't normally make is probably valid: people simply wouldn't do the additional calling in the absence of Skype (or one of its competitors). It's clear that mobile callers are highly cost sensitive and will respond to price incentives accordingly.
Right now the limitation of Skype's VoIP service to WiFi networks means that its use will probably not threaten voice minutes. Also, quality will be an issue so many people will choose not to use it except with international calling or in other, similar circumstances.
Skype, Truphone, Fring and others become most interesting perhaps in the context of MIDs that are not phones. VoIP turns those devices (with a connection) into a phone and may make MIDs more attractive accordingly. The two issues are the availability and speed of the connection and the quality of the VoIP service, which often still sounds like you're talking in a fishbowl.
Update: Om Malik, who broke the Skype-iPhone story, has done an initial review after several hours of testing the app. He was extremely positive about the experience and the call quality ("awesome").