Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Greetings from Kansas City, finally home to cool mornings. Although we just celebrated the Labor Day holiday weekend, we don’t think that it provides an excuse to take a break from chronicling the changes that are hitting the telecommunications industry.
Apple Inc. (AAPL) certainly did their part this week with their introduction of the latest iPod Touch with FaceTime video chat. There were many interesting parts of their press conference – Apple TV improvements (why is Apple TV an iPod product and not its own product line? See what I mean at www.apple.com), the new iPod Nano, new iOS4 and iTunes 10 improvements, and a new iPod. Next year will mark the 10th anniversary of the iPod’s introduction (chronicled in the article “1,000 Songs in Your Pocket”), but that isn’t stopping Apple from revolutionizing communication.
One of the CrunchGear reporters categorizes this as “the iPhone for my mom.” Steve Jobs went so far in the news conference to call it the “iPhone without a contract.” Consider this: The iPod Touch, at $229 (only $30 more than iPhone4) provides the same video interface as the iPhone, the same applications (except for GPS-centric ones), and play/stream the same music. With the addition of an applications like Text+, Text-For-Free, or Fun Mail you can have free SMS communication. And, with one of the many “peels” that will be introduced to hug my iPod Touch, I’ll be able to take my iPod Touch with me on a 3G or 4G network for around $30 per month. Hmmm … free SMS and free video chat, a 4G peel – if only Skype stayed free.
So what’s the real impact of FaceTime? Why will it be quickly disruptive? It removes traffic from the switched network. Not that we weren’t seeing the demise of voice traffic already with SMS/texting growing unabated. But the iPod Touch takes it one step further. Nothing in the iPod Touch requires the Time Division Multiplexed (TDM) network. Except to get “off net” (to another SMS user, for example), it’s all IP, and functionality resides through the application on the handset, not a series of central switches.
This is deep, so let it sink in. Your teen (or tween) will search for other FaceTime users and connect to them without dialing a darn thing. There is no dial tone. And they will have a better experience than holding a home (if you still have one) or wireless phone to their ear. Number portability – who needs that in 10 years? Long distance (which AT&T Mobility still advertises as “free” in their marketing materials) is irrelevant in the world of FaceTime. In-state vs. inter-state jurisdiction – who cares? Time of day restrictions? Not here.
On top of this, think about opening up a video communication Applications Programming Interface (API) to the entire Apple development community. Three way calling – the next horizon. Personalization options abound – what about visual ring tones? And what if I don’t want to be seen – the sale of placeholder screens that still let me talk but no camera (please!). Or a virual appearance screen that shows Justin Bieber himself mouthing my every word to my friends.
FaceTime is not about most of the readers of this column. It’s about our kids. They will grow up without a dial pad. Without T9 triple tap. Without area codes. Without “unknown caller” messages. Without fast busy signals. And maybe even without the (cable) phone company.
Apple advertised this announcement with the guitar moniker. Only a small part of the announcement had to do with music, however (the iTunes 10 release). Perhaps I am reading too much into the announcement, but did Apple just demonstrate their ability to outplay the entire telecom industry? Would a fiddle have been a better choice? If iPod sales skyrocket over the holiday selling season, you now know why.
Next week, we’ll turn our attention back to third quarter trends and start to look at the summer’s winners and losers.
Jim Patterson is CEO & co-founder of Mobile Symmetry, a start-up created for carriers to solve the problems of an increasingly mobile-only society. He was most recently President – Wholesale Services for Sprint and has a career that spans over eighteen years in telecom and technology. He welcomes your comments [email protected].
