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Video Calling The “Biggest Leap” Forward In Mobile Phones Since Original iPhone… Steve Jobs

Apple Unveils iPhone 4, Video Calling As Smart Phone Competition Heats Up

By PATRICK SEITZ, INVESTOR’S BUSINESS DAILY Posted 06/07/2010 07:13 PM ET

In what Apple (AAPL) CEO Steve Jobs described as a Jetsons-inspired dream, the company aims to make mobile video calling the next killer app for its iPhone smart phones.

Jobs demonstrated the application, called FaceTime, Monday at Apple’s Worldwide Developers Conference in San Francisco.

“I grew up with ‘The Jetsons,’ dreaming about video phones,” Jobs said, referring to the space-age cartoon. “And it’s real now.”

Apple CEO Steve Jobs holds the new iPhone 4 at the Apple Worldwide  Developers Conference on Monday in San Francisco. The new device offers  higher...Apple CEO Steve Jobs holds the new iPhone 4 at the Apple Worldwide Developers Conference on Monday in San Francisco. The new device offers higher… View Enlarged Image

FaceTime is one of 100 new features shipping with the newest version of its iconic smart phone, the iPhone 4. The device will be available June 24 in the U.S., France, Germany, Japan and the U.K., rolling out to the rest of the world by the end of September.

Better Screen, Battery

Jobs showed off a host of capabilities for the redesigned iPhone and its new operating system, now called iOS 4. The new device features a higher resolution display, video recording, an upgraded 5-megapixel camera with a flash, and improved battery life.

But he saved video calling for his trademark “one last thing” bit.

The iPhone 4 comes with front-facing and rear-facing cameras. FaceTime initially will work only between iPhone 4 devices and over Wi-Fi wireless hot spots, not cellular networks. Jobs says the quality isn’t good enough on cellular yet.

Other mobile devices are capable of video chat, but Apple has made it simple, says Ken Dulaney, an analyst with market research firm Gartner. “FaceTime looks pretty interesting,” he said. That users can switch between the front-facing and rear-facing cameras during a video chat is cool, he added.

Apple is unleashing mobile video chat at a good time because Skype video calling is growing popular, says Ezra Gottheil, an analyst with Technology Business Research.

“But the party doesn’t really begin until Apple arrives,” Gottheil said.

Apple’s iPhone 4 arrives as smart phone competition heats up, especially with vendors such as HTC and Motorola (MOT) selling devices running Google’s (GOOG) Android operating system.

The Whole Package

While other vendors might beat Apple on individual hardware specs, Apple excels at product design and marketing.

“With Apple, it’s the whole package,” Dulaney said. “They put the whole thing together, make it look great and then they advertise the heck out of it.”

The iPhone 4 is slimmer than its predecessors — 9.3 millimeters — and features a new glass and stainless-steel design.

Jobs called the iPhone 4 the “biggest leap” forward in mobile phones since the original iPhone, which launched in June 2007.

Much of the hardware announcements were leaked weeks ago by tech blog Gizmodo, which bought an iPhone 4 prototype that an Apple engineer lost at a Silicon Valley bar. Apple shares fell nearly 2% Monday. The Nasdaq also fell 2%.

The iPhone 4 will sell in the U.S. for $199 for the 16 gigabyte model and $299 for the 32 GB model with a two-year contract with AT&T (T).

The new phone runs on iOS 4, which features multitasking, folders, enhanced e-mail, deeper enterprise support and Apple’s new iAd mobile advertising platform.

The Cupertino, Calif.-based company said Monday that it will debut its iAd business on July 1 with mobile ad campaigns from big names such as Best Buy (BBY), Campbell Soup (CPB), Chanel, Citigroup (C), DirecTV (DTV), Geico, General Electric (GE), JCPenney (JCP), Liberty Mutual, Nissan, Sears (SHLD), State Farm, Target (TGT), Turner Broadcasting System, Unilever and Walt Disney (DIS).

$60 Mil Committed

Apple has advertising commitments totaling more than $60 million in 2010.

None of the Apple announcements Monday were earth-shattering, Gottheil says. But taken together, it’s enough to keep momentum going for the iPhone.

The most unexpected announcement was a gyroscope in the iPhone 4, which will help with video game apps, he said.

The three-axis gyro, when combined with the phone’s accelerometer, will provide six-axis motion control.

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