Apple Unveils iPhone 4 With Video Calling

Easy to use videoconferencing is the head-turning feature of the latest iPhone and the FaceTime application may pressure wireless carriers to provide more bandwidth.
In releasing the latest version of the iPhone, Apple has brought the media spotlight to smartphone videoconferencing, while also ratcheting up the pressure on wireless carriers to provide the bandwidth for what could become a lucrative feature.

Apple chief executive Steve Jobs introduced on Monday the FaceTime videoconferencing application on the new iPhone 4 at the company's Worldwide Developers Conference in San Francisco. While Jobs spent more than an hour before the announcement discussing other major features on the smartphone, the ability to have face-to-face conversations was the most impressive.

"That's clearly the standout announcement," Van Baker, analyst for Gartner, told InformationWeek

Clearly, the biggest advancement with FaceTime is its ease of use. While smartphone videoconferencing has been around for a while, the set-up process has often been complicated, which has discouraged adoption. With the iPhone 4, users can start videoconferencing much as they would a regular phone call.

"This is drop-dead simple," Baker said.

However, there are limitations. For now, FaceTime only works over a Wi-Fi connection and on the iPhone 4, which is powered by the Apple-designed A4 processor found in the larger iPad tablet-style computer released in April. Apple announced that it would make FaceTime available for licensing by other handset makers, but details on how that would be done were not disclosed.

Apple didn't announce integration between FaceTime and iChat videoconferencing on the Mac, apparently focusing on using the feature to drive more sales of the handset. In addition, by offering Wi-Fi-only videoconferencing, Apple is placing pressure on wireless carriers to work faster at increasing bandwidth to support more advanced features.

"They're throwing down the gauntlet," Baker said of Apple.

AT&T, the exclusive carrier for the iPhone in the United States, plans to deploy its 4G network based on Long Term Evolution (LTE) technology next year. Rival Verizon Wireless plans to launch its LTE network in 25 to 30 urban areas later this year.

Apple has been rumored for some time to be talking with Verizon about letting the carrier sell the iPhone. However, no announcement has been made.

IPhone 4 hardware support for videoconferencing includes a 5-megapixel camera on the front of the device, as well as one on the back. Also complementing the feature is a new display. Called Retina, the 3.5-inch screen is 960 x 640 pixels, or four times that of the iPhone 3GS. With a density of 326 pixels per inch, the screen makes text, images and video look much sharper and smoother than older iPhones.

Retina was good news for iPhone application developers. "People will want to spend more time on the device," Antti Hermunen, software planner for Finnish contract developer MK&C, said.

If people use the iPhone more, then it's more likely they will use applications and click on advertising, Hermunen told InformationWeek.

During his keynote, Jobs announced that Apple's iAd mobile advertising network for the iPhone and iPad would debut July 1 with 17 advertisers, including AT&T, Best Buy, Campbell Soup Co., Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever and The Walt Disney Studios.

Jobs said the advertisers had committed to spend $60 million in advertising in the second half of the year, which represents half of the total U.S. mobile ad spend forecasted by JP Morgan for that time period, according to Apple. Developers who include ads in their iPhone or iPad applications keep 60% of the revenue.

The iPhone 4 is scheduled to go on sale June 24. The device is a quarter thinner than the current iPhone, has a glass front and back, and will be available in black or white. The 16GB model will cost $199 and the 32 GB version will cost $299 with a two-year data plan. The smartphone will launch first in the United States, France, Germany, the United Kingdom and Japan. Apple plans to roll out the iPhone 4 to 83 more countries by the end of September.

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