FaceTime – Has Apple Suckered the Operators Again?

August 1, 2010

in iphone, Mobility, Skype + VoIP, Strategy Formulation

This is one of three posts I wrote on FaceTime just after purchasing my iPhone4 and mentioned  here.

There is a hidden trojan horse story behind FaceTime – Apple’s new video calling solution. This post highlights why it is more than just video and suggests reasons other handset manufacturers should take a closer look. Then consider if Apple suckered the mobile operators yet again.

  • What is FaceTime? What’s the initial experience?
  • Why FaceTime beats Skype.
  • What standards is it based on?
  • Signaling Call Setup. Does Facetime infringe on other patents and intellectual property?
  • Is it really iPhone4 only or could other handset vendors connect to Facetime users? PC users?
  • What are the shortcomings that will be fixed in the next year? Where next for Facetime?
  • What are the implications in the enterprise?

As I took home three iPhone4’s last Thursday (iphone launch day) it was FaceTime that had the biggest impact on me. Turns out it is elegant and easy to use. It’s also a typically disruptive innovation. It’s hobbled, and not yet the best video solution. It also requires WiFi and an iPhone4. Apple, like they did with the original iPhone (no apps web apps William Volk on Apple’s Boca Raton moment), has effectively chosen to hide their real intentions. Out of the box, its usability makes it instantly the best mobile video solution.

What is Facetime?

This post is not designed to debate the merits of the iPhone. They can be found elsewhere. So lets focus first on my initial FaceTime reaction.

  • Simply… WOW” Skype like video on my iPhone. It looked like Skype (and I do use Skype Video with a limited number of people almost daily) and it had this magic second view – let me show you what I’m seeing. It took me a minute to stop sharing my neck and about the same time to realize that this works better than I may have first thought.
  • In Face to Face mode it’s less disconcerting than expected. You find yourself talking to a screen with no headset (speaker phone) and holding it relatively close 12 to 18 inches – face to face- so as a head shot it still felt private. In fact this point re putting the phone in a very personal space may be critical. I can see people having short video calls in a Starbucks. It’s possible and less invasive than I imagined. Add a headset and even better.
  • A little later, sort of a joke, I used it like an intercom to call my daughter for dinner. Hey, it’s sick I know, still I’ve even texted her with dinners ready when she is in the next room.
  • I got back to my desk later and thought. Hmm if I bought a dock for my iPhone it would stand on my desk next to the computer and it would work perfectly for video calls. In fact all calls. No need to even hold it and FaceTime calls are free!

So is it a WOW gimmick? Video calling has been available in parts of the world for years and yet it has never really taken off. I’ve seen it demoed but never had the power of video in my hand for constant use (so that frames some of my perspective). What makes it better? Or not?

My impression is the screen size. This is face cam and ‘see where I am’ cam. Will these calls be long? Perhaps not and the quality isn’t at Skype levels. Still there is something similar to the iPad moment or the iPhone where you are watching TV and reading etc at the same time. Now mobile in hand you are in the right place  more often to have a video call. No need to go to that PC. And get ready. This is video in your pocket anywhere in the house or wherever you have wifi. And the set up is even easier than Skype (see comments below).

There is one big limitation on FaceTime. You must currently be in a WiFi zone and have an Apple product for now. The public story is the carriers aren’t ready for video over the network. The implied suggestion is that carriers may be able to charge for video calling later. Fact is that’s what killed it in the past in Europe. Cost per minute. By contrast FaceTime is free when you can make it work.

So how and why does Facetime beat Skype?

Well that traces to the part I was most curious about. The signaling and video call setup. It’s also going to quickly trace to numbers of users and the installed base. The screen below shows an additional button. I can escalate this call to video by pressing the FaceTime button. The first time I used this I just called my daughter and she answered. I didn’t think about how it knew FaceTime should be an option. The normal phone call started and then I just pressed the button. We were both on WiFi and so she instantly got an accept/decline a FaceTime session request. We escalated to Video and the AT&T call was dropped. Not quite a seamless transfer as video came on… but almost.

So unlike your first experience with Skype there is nothing to download, no account to setup and no buddies to add before a call can be made. I only have to know the number to start a video call request. That’s key. If I know your number and you have FaceTime then we can escalate to a video call. This call is Free.

Yet at this point I was still a little baffled. It appeared I had a call setup cost.  Ok I can call you and then if you have Facetime and are on WiFi I can escalate the call and we can get off AT&T. But I was concerned. In the US it doesn’t matter. All calls within the AT&T network are unlimited. What I was worried about was the setup cost for an international FaceTime call. Still I found the answer quickly.

The FaceTime call dropped. You just press reconnect. No dialing AT&T. FaceTime knows the other person’s “account” and where you are directing the reconnect request. So it was obvious that you should be able to set up a FaceTime call without a voice call via your carrier. Turns out you can – it’s just not quite so obvious. I’ll provide the method and save the discussion for signaling and standards.

The solution for making direct FaceTime calls currently is to either: Look at your recent calls. If one is marked FaceTime you can simple “redial” and you will send a FaceTime request. No reason you can’t save these in your Favorites too. Second. Look up the contact and then scroll down. There’s a FaceTime button. Press that button and you can associate a mobile number (needs FaceTime at the other end to not fail) click it and try and connect.

Skype’s problem?

We now have a mobile Skype Video equivalent in our pocket without chat. By sales Apple will create an automatic installed base in the 10’s of  millions.  There’s likely to be three times more FaceTime users in a year than Skype has concurrent users online. Of course these FaceTime users may not all be in a hotspot just like Skype users aren’t always at a PC. Despite Skype’s success on the iPhone they can’t beat the utility of everyone having it. Importantly… no need for a new buddylist. For now, Skype does have an advantage going across different mobile platforms – Android, Symbian, Apple, Linux etc.

What Standards is FaceTime based on?

Apple has built FaceTime using all the VoIP telephony standards. For now it is closed or at least semi-closed. Yet there is no need for it to stay that way. Here’s a link that explains the standards.

Apple announcement of FaceTime, their new video telephony solution, included various standards: H.264, AAC, SIP, STUN, TURN, ICE, RTP, and SRTP. If this is the case, it would offer great start for interoperability, as the very same standards are widely used by the modern video communications solutions by majority of the vendors.

So in simple language it is generic VoIP/Video with a great UI. There’s no reason it won’t connect to all sorts of other systems in the future. The desktop client is almost certainly coming or perhaps in iChat it is already here. Although frankly let people build the client they want (like Twitter did). There will be more innovation.

Signaling Call Setup. Does FaceTime infringe on other Patents?

With all these standards and the ability to set up FaceTime calls directly using them it’s obvious that Apple is creating the appropriate SIP etc accounts to make it all work. So how’s that done.

Simple, I presume although I’m not the one to look under the hood. Let someone else comment on that. I’m assuming the moment you register your iPhone4 with iTunes that Apple is waiting. They create at least one SIP account on your behalf. Let’s call this example “yourphonenumber@me.com” or +1925xxxyyyy@me.com. They may also create another based on your iTunes handle and profile although there’s no need to do that now.

What’s really cool about this is it automatically turns your current mobile phone number into a SIP and thus VoIP line. This is huge and something I’ve discussed with others in the past.

Example. Take a look at PhoneGnome.  Apple could be infringing on a number of patents in this case. Phonegnome turned your PSTN line into a voip line. It made a SIP address out of your landline number. It then tired to connect all calls via VoIP first before resorting to using the PSTN. VoIP to VoIP or PhoneGnome to PhoneGnome was free.

Apple’s being a little more crafty with the launch. They haven’t told you they’ve registered a SIP address on your behalf. They are just suggesting that the Carriers may have an option to work out something re 3G video calling. At least that is what it looks like. In the meantime it’s magical.

However, if I try to connect a FaceTime call and you are not online there’s no automatic roll-over to the mobile carrier today — but there could be. In FaceTime we have a 100% VoIP/Video solution that can set up calls outside of the Carrier. In fact Apple has the signaling process built in. It’s the Apple notification server. A simple little programming and the signal is sent and rather than presenting a notification it presents as a FaceTime call request. Craftily Apple has not yet exposed a chat option. That makes it look like a video solution rather than the multifaceted communication service it is going to be.

So what models does this set up for carriers? In other posts observers have alluded to the App store as Steve Job’s moment where he wrestled control of ringtones to music from them. I think there’s another one hidden in FaceTime.

Apple effectively has control of all signaling between iPhones for call setup and acceptance. They have a migration path to an iTunesID which will soon become a gaming identity (and social network). The Apple notification server and thus the signaling API is open. Anyone can set up a notification service to iPhones. So potentially others could signal that they want to use the “Facetime” video setup as well.

Is it really iPhone4 only or could other handset vendors connect to Facetime users?

In the Apple universe I don’t opt-in I automatically get FaceTime with iPhone4. Apple has set up my account for me. Yet the standards are fairly generic. So as a thought experiment if Nokia or Android built an App that used the Apple notification server for FaceTime setup with iPhones and created an App for me to download that I ran in the background…. then I can opt in as a user to accept FaceTime Video call equivalents from an Android friend or Nokia pal.

That would be pretty neat. That app would have its own notification server for Android or the same for Nokia. There’s some benefits in creating these and it’s what differed from all the other previous mobile video systems. Call setup was managed by the carriers. Now the handset vendors could all get in on call-setup solutions.

You may ask?  Why would Nokia or Android do this? It makes their handsets more valuable. It also makes me happier as an iPhone user. The downside is… it remains opt-in until Apple really opens up this service.   This will only come where everyone is using the same approach. I’d think it will help Apple to be very open about the standards they are using.

What are the shortcomings that will be fixed in the next year

At the moment there are many features missing from Facetime.

  • There is no way to dial a number and rather than press call simple press a Facetime button on the dialer(plenty of VoIP/Sip apps have enabled this with their own dialers).
  • It’s easier to make that FaceTime call again from the recent calls list. It’s a hassle to use the “contacts” workaround. Yet in the US these calls aren’t being sold yet as “free” – but they are!
  • I can’t get status of who’s online for facetime. That’s almost certain to come with the gaming network in the fall.
  • If I try and initiate a Facetime call with you and you aren’t there there’s no notification message sent. This could be sent by the Apple notification server.
  • Similarly there is no request mechanism for Facetime where acceptance on behalf of the receiver would raise the video call.
  • FaceTime is also the future of CallerID. In time it could present any profile you want as a request for Facetime. It also can be modified over time to provide context with the FaceTime request. That’s simply huge. I worked on this by creating Phweet. Apple has applied my model. It’s just not all visible yet.

What are the implications in the enterprise?

Above I wrote that the dock on the desk may now have new value – and not just as a charging dock. It makes sense to bring video into the enterprise. In FaceTime makes it super easy to bring VoIP into the small enterprise.

Now we know Facetime is SIP / VoIP based. Now consider the traditional problems for provisioning a SIP network for a small business. Think about the duplication of numbers (mobile and desktop). Now every iPhone comes with SIP in a box. Nothing to install, no accounts to manage, no new numbers. Every extension is now both SIP and mobile. It is just one SUPER BUSINESS number. It may also be associated with other profiles.

That may actually be the biggest trojan horse in FaceTime. If you are an enterprise then Apple just simplified the whole SIP/VoIP/Video equation. If you are Blackberry/RIM then you are now dead. Why would I bring in Blackberries when they can’t match this utility?

I can see a business world where “FaceTime” is the dock on the desk and the desktop phone is gone. It’s worked for the laptop and works with the docking stations in so many enterprises. This is along the same lines.

So let’s wrap up.

A Trojan horse appears to perform a desirable function for the user but instead contains some surprises inside. In this case FaceTime facilitates a way for Apple to take over the mobile numbers from the carriers and then uses them to build their VoIP network and replace the traditional numbers.

This solution is Skype reinvented – an invisible VoIP solution with zero setup costs. It also looks more like Twitter and traditional telephony and doesn’t have the hangups of “will you be my buddy?”. It provides future opportunities to manage the inbound stream of call requests (ie filter access).

It steals your “number” and makes it more valuable and thus eliminates the need to be in the GoogleVoice world with yet another number using traditional signaling methods. Apple can build in many more smarts into the notification system.

Apple is creating a legitimate new market for video. It will remain closed at least for now. The iPhone4 population will ensure it grows in popularity. There may well become real benefits for having FaceTime. I expect some businesses will prosper immediately. Charging for FaceTime is coming guaranteed.

Apple is also creating a mobile video solution before the Skype’s can really make it happen. It has the advantage as it comes preinstalled. It also automatically runs in the background and is likely to drive sales. Particularly in families where there is a family plan already.

  • Pingback: Tweets that mention FaceTime – Has Apple Suckered the Operators Again? | Stuart Henshall -- Topsy.com()

  • Stuart,
    Regarding the enterprise – you only point at the SMBs here, but what will be the implications on the larger ones? Those that have been deploying video conferencing for years based on the H.323 standard? Will they be willing to open up and enable SIP on their networks (a purely configuration issue) or will they leave mobile devices out of the game?
    Tsahi

  • Tashi, I have a couple of more FaceTime posts coming – one which looks at the enterprise. I expect that H264 will become the standard. The key is what happens when there is a video phone on every desk… and when that video phone is a mobile device. Cisco’s product goes in this direction. I’d like to see it in context – but I suspect the iPhone and iPad / iPod Touch like devices will challenge it.

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