After causing conflict across the mobile phone industry over recent weeks, Skype has now managed to arrive on the iPhone and the iPod Touch, which has itself caused more than a few ripples through the industry.

The free Skype application essentially allows users to make free calls over the internet to other Skype users, as well as low-cost calls to landlines all over the world. It also allows users to send texts to mobile phones.

However, it is not all as great as it sounds and will surely not make the iPhone network providers, which in the UK is O2, redundant. For a start, Skype can only be used on a Wi-Fi connection rather than 3G. This means that users cannot simply use Skype rather than their regular network whenever they want.

On top of that, the call quality will vary depending on where the phone is being used. If the Wi-Fi connection is in a bar with lots of other users, it will not be as good as using the regular network.

However, the application’s popularity has been phenomenal, racking up over a million downloads in the first two days alone. This is sure to worry the industry players, who will be worried about losing revenue to calls made over Skype. Only recently, O2 and Orange were threatening not to stock the Nokia N97 unless the in-built Skype application was removed, so it is fair to say that they will not be too happy with the latest developments and will be hoping that Skype does not prove as popular as it’s download figures have suggested.