The iPhone (Stock Quote: AAPL), was designed to be the perfect on-the-go accessory for our increasingly mobile lives. In addition, one of the best features about the iPhone is its rotating cast of new applications you can download with a few clicks and for only a small fee (or sometimes totally free).

As these apps become more commonplace and are improved with newer versions, there can be an overload of choices. That’s why we’re here. Let MainStreet be your guide to increased productivity and money-saving tools on your mobile device.

In our first installment, let’s discuss the free Internet calling service, Skype, and its latest iPhone app. Since 2003, the basic version of Skype, which is owned by eBay (Stock Quote: EBAY), has been a popular Web destination for everyone looking to bypass the expensive long distance phone call cartel. Using just your browser and a computer microphone, you could place or receive a call anywhere in the world for free.

Now that technology is in a neat little mobile application. One of the coolest possibilities for this is its installation in an iPod touch. The iPod touch, although lacking the phone component hardware to make or receive traditional calls, can become your own mobile call center with this easy and absolutely free application. Now you don’t have to get that $109 average monthly usage calling plan ... or do you?

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We may have to back up the truck just a tad there. Of course there are some significant drawbacks in that “free calls” plan. You didn’t think the communications industry would let you off the hook that easily, did you?

To take full advantage of free calling you will need to place and receive calls via a Wi-Fi connection (you can also connect to Skype using the iPhone's 3G network but it will be slower than Wi-Fi). Meaning you’ll need to be in an area with public Internet access or near a private wireless router. That’s not always the most convenient way to be mobile, is it? On the other hand, these Wi-Fi calls won't subtract from your monthly AT&T (Stock Quote: T) minutes and as always, Skype-to-Skype calls (calls placed and received to your other Skype user contacts) are completely free over Wi-Fi. You can also place and receive calls through Skype using your AT&T iPhone service. After all, that 3G network they hype up so much powers it. However, you will incur extra fees from Skype for these calls. You will be paying Skype for a connection service in addition to monthly subscription or pay-as-you-go fees.

But even with a 4-cent Skype connection fee on top of these costs, the prices for connecting to a landline or mobile device using your iPhone AT&T service are still significantly cheaper than the cost of owning a full standard long distance calling plan. Compare this 2-cent pricing plan with your carrier. So if you’re calling down under to check how cold the beer is in Sydney, you’ve just saved yourself a ton of money using Skype.

One difficulty we should point out, however, is the iPhone user-experience for Skype users. Most of these problems stem from the way applications are designed to run in the background on the iPhone rather than simply taking over the system. Let’s say you’re playing a cool racing game on your iPhone while waiting for your parents to log in to Skype to speak with you. With the Skype app, you’ll be waiting an awfully long time. There is no override or interrupt system when incoming calls or outgoing calls are attempted with another application running. So that game will be at the forefront, and the Skype app will basically shut down in the background. There go all your hopes and dreams of placing lots of free Internet calls while multitasking on your iPhone.

So there you have it. Skype is an impressive and useful application for making free phone calls over a Wi-Fi connection, but it does have its limitations. In real-world terms, you won’t be able to forego your expensive AT&T calling plan with it, but it will help you save some decent money as a supplemental calling option.


Application: Skype for iPhone/ iPod Touch

Cost: Free

Use: Allows you to make free domestic or international calls over a Wi-Fi connection.

Other Mobile Platforms: Skype will not yet run on Blackberries. They said it was supposed to be out in May, so they’re a bit late. But the CEO promises that he’s going to hook us up real soon. Not cool, Skype.

Download iPhone App via iTunes

Download Skype Lite for non-smartphone devices

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