Skyfire has announced that they will be scaling back operations and development beginning July 1, 2010.

The decision appears to be the result of demand out pacing resources. Skyfire users have grown 400% in the past year and Skyfire has been approached by several vendors and wireless providers to become default browsers for their handsets.

The scale down will call for a stop for all future development on Skyfire 1.0 (only used on Windows Phones and Symbian phones) architecture and focus on Skyfire 2.0 as the flagship product. Additionally, Skyfire 1.x will no longer be supported outside of North America and Western Europe.  Skyfire 1.0 and 1.5 will remain available as a free service in the following countries after July 1st: United States, U.K., Canada, Ireland, Portugal, Spain, France, Germany, Belgium, Italy, Finland, Netherlands, Norway, Sweden, Switzerland, Korea and Taiwan.

Jeff Glueck, CEO of Skyfire, stated, "We know this decision is an inconvenience to many Skyfire 1.5 users in emerging markets, and while it’s a free service, we appreciate how important and valuable Skyfire has become to people. We have read the many impassioned messages from users in affected countries, and the choice to focus on our flagship product does involve trade-offs which are never easy."  Skyfire will move forward with continued development for Android phones, submit a version to the iPhone App Store and hopefully have a product available for the Windows Phone 7.

You can find the full announcement here.