FaceTime – Call it SIP 2.0?

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August 2, 2010

in iphone, Mobility, Skype + VoIP, VoIP

This is a second in a series of FaceTime posts I wrote privately a month ago. I referenced them here. and asked yesterday “FaceTime – Has Apple Suckered the Operators Again?”. I also posted on the “Scramble” this creates.

FaceTime – What It Really Means?

Apple launched FaceTime video calls with the iPhone4. Most of the discussion around it has centered on how to make video calls and on the deficiencies. You must be in a hotspot thus on WiFI and both parties need an iPhone4. More in depth discussion tends to focus on call quality and usability.

That’s all great, but these discussions miss two important points:

Apple FaceTime is a threat to mobile operators’ business models. FaceTime is Apple’s in-your-face response to AT&T and all Mobile Carriers. FaceTime will destroy the “signaling” system i.e. the phone numbers used to bill you and me for minutes. FaceTime is phase two (phase one – App store) of the company’s plan to turn the mobile operators into dumb pipes.

Apple’s FaceTime model will now be rapidly copied by Nokia, Android and Samsung. And again there is nothing the operators can do about it. Apple has set itself up for a box seat at the SIP2.0 party if SIP ultimately is even where it is at.

Introduction:

We know that FaceTime works. Steve demoed it and I myself have tried it out on my family’s new iPhone4’s. I’d classify it as a disruptive innovation. If you watch the VoIP / Video space you will understand that it is hobbled with restrictions.

The hotspot, the iPhone4, it’s Video only, even the initial call set up seems to use your mobile number. Currently there’s no VoiP only (put your finger over the camera – you know how to hold it!) and obviously no chat capability. So on launch, FaceTime doesn’t look like Skype, or Gtalk or GoogleVoice or the myriad of other Chat/VoIP clients out there.

Apple has said they are using a core set of standards http://blog.imtc.org/index.php/2010/06/09/the-technology-behind-apples-FaceTime-standards/ in the operation of FaceTime. I’m sure they are. There’s no particular secret sauce obvious and the video and voice quality is strictly ok. For me it is still WOW this is Skype like video on an iPhone, it works.

First key points about the FaceTime call

i. A Skype Video like performance. It works with all iPhone 4’s and it uses WiFi. So we know it is VoIP based. How does it differ from Skype on the iPhone? (There are other VoIP / Video Apps eg Fring, SipPhone etc) First it requires no download, no new account to be set up, and no approval by a buddy to be contacted. Skype doesn’t reach all iPhones even though it is popular. FaceTime’s current installed base is all iPhone4’s.

ii. Nothing to setup. This means that Apple has created a background SIP/VoIP account on your behalf. In fact Apple knows more. Apple is doing a PhoneGnome on the IPhone4. When you register your iPhone4 via iTunes Apple creates a SIP/VoIP enabled account. Example. yourmobilenumber@me.com or 1925xxxyyyy@me.com or your itunesaccount@me.com. That’s what I mean when I say there’s nothing to set up.

What’s this mean? For that we have to look at the two setup methodologies:

a. Normal Call to iPhone4 user escalates to FaceTime. In this instance I dial your number and then when connected I press the FaceTime option and Apple checks to see if the other person is on an
iPhone4 (see they must have a registry) and if so sends a notification via the Apple Notification server which is presented (if the other user is on wifi) as “stuart henshall wants FaceTime”. The receiver then accepts and the AT&T call is dropped and the session is now a VoIP/Video call in progress.

b. FaceTime Session in Progress Drops. This is the next clue. The FaceTime session drops for some reason. Your screen presents the option to reconnect. Note this reconnection doesn’t require you to dial their number. You press the FaceTime button and the call is reconnected. You can make FaceTime calls by using the “recent calls lists” or by using a Contact and scrolling down to the FaceTime button which will associate a number that you can try out. Currently you can not use the normal keypad and then press a FaceTime option. That would make it obvious to AT&T that you are using their or is it my mobile number to create these seamless VoIP/Video calls that are FREE.

c. FaceTime to FaceTime. As noted above, in the redial, you can make a FaceTime call. In fact you can associate any contact with a FaceTime number. Ie you know their phone number and you say…
use this number for FaceTime. This is currently an example where FaceTime will try and set the call up – and tell you that it is not available.

What’s important here? Apple is going to juggle using iTunes ID’s and mobile numbers to build the facetime community. We don’t know yet what will happen when the iPod touch launches with Facetime. Will I be able to dial? a FaceTime iPhone4 or will it be a simple addition to your contact directory.   In fact there are many options for how this could play out. Including an obvious one –  setting up a mobile number verification in iTunes and then enabling a “FaceTime” download for Android, Symbian, MeeGo etc. Maybe I get ahead of myself here :).

Implications for Carriers/Telecom Operators and Handset Manufacturers

Part 1: How does this destroy the value in the Traditional Numbering System?

Apple is creating a parallel signaling universe. By copying the mobile number and using it to set up FaceTime calls it is lulling the operators into a sense of greed and complacency. While they may believe that they will be charging for 3G video minutes and it looks like they are good for call setup, the opposite is true.

Today the easiest way to set up a FaceTime call is by dialing. That’s fine re AT&T but there’s also a delay in the transfer. There could also be costs if doing this internationally. So it makes sense that there’s a workaround as stated above. Still wouldn’t it be quicker and cheaper (FREE CALLING) to set the call up using SIP / FaceTime first and if they aren’t in a hotspot roll that call over to the traditional GSM connection? In fact this isn’t a new idea. Nokia had this built into many handsets (my N80 and N95 being good examples) and Truphone has built a business on managing this tradeoff. The big difference is… they never used my mobile number. They never put it in every handset and it always required complicated account setup.

Apple’s notification server is the future. It not only provides twitter or facebook notifications or in fact any app update you subscribe to it also can set up calls. I used it in Phweet demos and Apple makes it simple. FaceTime is a special case currently using the notification server. It presents a CallerID “stuarthenshall wants FaceTime” and currently doesn’t filter the request. So I don’t have to be your buddy. Like a traditional telephone call, this interruption is just presented.

This is why the Apple system destroys the traditional signaling service and may well wreck SMS in time. Apple’s notification system can grow to rich callerID’s, it can also over time “filter” the types of requests for FaceTime you get. Eg on temporal context (what you are doing) or simply on the basis of Context. Eg you want context before the call. Add a message that is present with the request for FaceTime.

Apple takes a “dumb number” and turns it into a “smart invisible number”. In FaceTime you never see the number. In time you only need to know the contact or profile you are calling. After all we are names not numbers. FaceTime has taken all the complexity of VoIP and SIP and all that garbage about creating new accounts and hidden it all away.

I expect when Apple launches their gaming network over time they will enable it with Chat. They will enable you to associate other profiles with it. These FaceTime sessions will never need to share a number. And just like you can “block” people now in Skype… or GoogleVoice you can block them or their profile from contacting you in FaceTime. When that point is reached… All you know is I have an iPhone4. There is no need to share even the number anymore.

Without numbers the carriers are merely dumb pipes. They’ve had options to turn SMS into a SMART Pipe. They could be using that with clients on mobiles to limit data access and provide smart caller ID’s. Yet now it is too late. They are losing the opportunity to broker the exchange. Apple’s notification server is going to broker the exchange because “Free” beats charges any day. Plus now I have my FaceTime account (itunes/Apple/ whatever we call it) I will be able to use FaceTime to sign in to any Safari page (ouch SkypeKit) or download desktop or TV clients etc that use FaceTime and can be set to ring… take a call or transfer a call to. It’s coming.

Part Two: The Handset Manufacturers follow:

Apple is making this game obvious. Lets for a moment, look at Google. Google has their vaunted GoogleVoice service. It does many neat things. It can do all this filtering, it can route calls to different places. With one big failing. It requires you to get another number. Number portability means I own my number. I know Apple didn’t ask me to use my number for FaceTime (maybe they did I never read the fine print) but FaceTime does require a number/name lookup to connect the calls. Google Voice works in a world where “numbers are dumb”. GoogleVoice is a work around. It’s a cloud solution rather than a primarily P2P solution. Still I think it would be straight forward to start thinking about how FaceTime influences GoogleVoice. I bet GoogleVoice will soon come with every Android handset. Unfortunately that isn’t a message the operators want to hear.

Let’s look at another thought experiment. The Apple notification server is open. In a year there will be 50 million iPhone4’s all capable of using FaceTime. So how can I FaceTime with a Android Nexus1 or with a Nokia N8? There’s no magic. As a user I download an Android App onto my iPhone. This app uses the video and runs in the background. Now anytime an Android user wants FaceTime with me… they can send a “signal” via the Apple Notification server (its open you can program for it) and my app presents the call. (Of course  Apple has to approve this app). If I accept we have a video call. Now that’s a little clunky. It makes more sense for Apple to either 1 open up their registry, or 2 make it easy for Android and Symbian users to register their mobile number then download an app and they too can have FaceTime with Apple users.

More likely we will see Google follow Apple’s lead and introduce an OogleTIme in the next generation of Android. OogleTime will work just like FaceTime in the beginning. Nokia can launch their MeeGoCam. Yet the real value is when these are all interconnected and that is where all these high end handset vendors have a common interest. You sell handsets today to customers not to carriers. (Both Google and Nokia are still struggling with this. – Google has more power re Android). Apple’s notification server has been overlooked and ignored by too many. I hope it is now obvious that it provides a contextual based signaling system for rich call setup that is outside the operators control. It requires a dataplan to operate so it will take some time.

Finally, I said that Apple has given itself a box seat for the SIP2.0 party. That’s because they are using standards and yet the result is totally invisible. They can demand that participation requires association with a mobile number. They can propose the registry rules. This registry is going to hurt Skype most of all. That’s one of the few assets that Skype has and Skype doesn’t come preinstalled on any handset.

Summing Up:

My view is one that FaceTime is another trojan horse offered up to the carriers as a potential money maker that, with a few simple changes, will add chat, VoIP, multiple callerID’s, social networking functionality,
context before the call, filtering of calls, presence and availability info and more.

For the rest the the handset vendors it remains a “me too” world. There’s nothing really new in this strategy. PhoneGnome has patents in this area. My own startup Phweet (phone plus tweet) demoed in 2008 how to set up this solution and sought patents on the CallerID approach. The industry will look at FaceTime soon and shudder.

FaceTime just wrestled control of my CallerID and my number from the carrier for me and no doubt their benefit. Add in Geo info and a few more smart device handoffs and communications in five years won’t look like it has in the past.

That doesn’t mean there aren’t options for Carriers, for handset vendors, for hardware vendors etc. Yet so far they have shown they aren’t ready to embrace the new world.

Late Additions

Yesterday “jailbreakme.com relaunched offering iPhone4 users a potential way to use FaceTime over 3G. I doubt the quality will be great and will likely test it myself. The  new iPod Touch will likely launch in September. There’s going to be some interesting aspects in how it uses FaceTime, how the gaming network get launched and how these changes dock with the iPhone. Of posts I’ve seen they also suggest that a user may have multiple profile… so if you have seen the o{jpmeFaceTimePorn references then there may well be a “privacy” by profile rather than number. Apple would do better by enabling “profiling” sites to dock with their system. Separately there’s been discussion on tel:// URL’s like the Skype “callto:// and implications re the Safari browser and even earlier Phones. FaceTime could beat SkypeKit to market at this point.

There’s plenty that can be discussed around FaceTime. The VoIP revolution continues, it has moved to Mobile and added Video. It’s being driven by users now rather than just geeky tech implementations.

  • Stuart,
    The thing that hit me the most after reading your post is that this is probably a way for Apple to get the voice business out of operators – it has nothing to do with video – or at least less to do with video.
    In a way, Apple seems to be headed towards being its own over-the-top service provider and not a handset vendor at all.
    Tsahi

  • Tashi,
    Great insights thansk for sharing them. I’d agree that this takes the voice business away from operators and potentially sets up a “skypekit” type world where voice is just another element and the “exchanges” are managed by the users.

    Video makes it interesting, enables apple to build the platform behind the backs of operators and then layer in the other chat/messaging, voice only features.

    I find your comment re over the top service provider most interesting. While some time out it’s an option and world view that worth keeping a watch on.

    Cheers
    Stuart

  • Pingback: FaceTime and the Enterprise – Apple’s New Threat to RIM and Cisco | Stuart Henshall()

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