By BoLOBOOLNE payday loans

Video Chat is about to enter the Early Majority Phase with iPhone 4

I believe that the iPhone 4 will be remembered as the device that invented video chat.  Just like how the iPod is often seen as the first real mp3 player.  It wasn’t at all of course.  There were dozens of mp3 players before it.  But the iPod set a new quality bar which was so much higher than everything before it, that it redefined the space, and actually made it accessible to the mainstream.

Video chat is in a similar place today to where mp3 players were 10 years ago.  There are lots of video chat solutions out there on the market.  Skype is the most well known.  I helped launch Google’s video chat system across Gmaill, iGoogle and Orkut during my tenure there.  It definitely is one of the best on the market, and it’s still only appealing to early adopters.  I mean “early adopters” in the classic Everett Rogers sense, which is to say folks for whom the extra value of the new technology outweighs the hassles of using it.  This is a step beyond the “innovators” category, who are willing to bend over backwards debugging a brand new product just because they understand that it will be important later.  Video chat has been available to innovators for a great many decades.

With iPhone 4, Apple will push video chat to the early majority category. Apple has a history of sitting on potential technologies until all the bugs are worked out, which is fundamentally what’s needed to appeal to more than just early adopters.  I’m pretty sure FaceTime will be no exception.  In 6 months, video chat won’t be this geeky thing that people put up with out of desperation.  It will begin to be integrated into normal culture.  We’ll start to see television dramas and movies incorporate it as just a way some people communicate, rather than as a way to demonstrate how high-tech somebody is.  People who aren’t geeks will start to use video chat.

Video chat really matters

Those of us who have lived deeply with video chat understand its value.  There is a ton of additional content transmitted in video that helps communication on many levels.  It allows for a more nuanced informational discussion, but more importantly IMHO, it allows distant communication to be much more personal and emotional.  Anybody who has tried professional collaboration with another team that is thousands of miles away knows that this level of communication is at least as important for business uses as it is for social communication.  The first time you meet your collaborators in person, they become more real, more trustworthy, easier to talk to, especially about difficult subjects like problems that might arise in a project *gasp*.  Video chat is certainly not as good as meeting people in person, but it is a huge step above email, IM or phone.  (Getting drunk together I believe represents the highest professionally-accepted level of humanization.)

Human-to-human communication has always been the killer feature of computer technology. Video chat makes synchronous communication fundamentally better, and as such will become a major part of everybody’s life in the developed world in the years to come.

What does this mean for everybody else?

The history of technology innovation tells us that a couple things typically happen when an emerging technology pushes into the majority segments.  First, established players will all get a boost.  Apple will be doing a huge favor to Skype and Google Video Chat by removing the veil of geekiness from their products.  Apple’s huge investment in making this product work well will make all consumers more willing to try alternatives.

Another common side-effect is that the space will get more difficult for new entrants.  This usually happens as the technology standardizes.  There becomes a “normal way of doing things” that people start “to get.”  Before a technology can reach the majority, it will typically bounce around dozens of different modalities as everybody tries to find a way of doing it that resonates with the market.  This uncertainty represents a clear opportunity for start-ups and the subsequent standardization is the closing of that opportunity.  Another reason the space usually gets harder for startups is that economies of scale start to kick in as production levels ramp up to meet the larger demand.  This naturally favors large companies, since it raises the amount of investment needed to compete.

Which Social Graph?

Another reason the space might get harder for newcomers is the natural monopoly of social graphs — consumers are better off if there is a single definitive place to keep track of their contacts rather than having to replicate and maintain a different list for each service.  As such, social graphs are important assets to anybody in this space.  But if Tim O’Reilly gets his way (which I hope he does) and we end up with a loosely-coupled internet OS, this won’t be a problem for startups, as they’ll just be able to draw from an openly available graph, say from a Google or Facebook.

I’m really not sure how this aspect will play out.  My guess is that Apple will rely on the de-centralized social graph which is the contact list built into every iPhone.  It’s a less useful corporate asset than if it were properly cloud-hosted, which will make it harder for them to expand the service to OS X machines.  Perhaps they’ll make something useful out of mobileme here, but I have my doubts.  But given the revenue they get from App Store sales, it’s not clear that the OS X machine is even a major part of their consumer strategy going forwards.  If so, this would likely be a strategic shift for them, as the inclusion of web-cams on essentially every OS X machine for years was probably done in anticipation of making a major push into video chat at some point.

Don’t forget Cisco

In addition to the obvious players like Google and Skype, this is also incredibly important for Cisco too.  Cisco has long been interested in video chat.  Why?  The same underlying reason Intel has been investing in multi-media since the late 1980’s.  Multimedia on PCs needs lots of CPU power, and video chat needs lots of bandwidth.  It’s called “primary demand stimulation.”  To be very clear: Cisco wants everybody to use video chat because video chat uses lots of bandwidth, and when people are using lots of bandwidth, Cisco sells more big routers.

Cisco is in the final phases of buying Tandberg, who is the biggest supplier of video-chat hardware for businesses.  Their aquisition of Flip last year seems strategically odd in isolation, but in this context makes perfect sense.  They are building (buying) expertise in consumer-electronics which can handle high quality video.  Take a Flip camera, add a network (like a linksys wifi box) and you’ve got a video chat terminal.  I predict we’ll see such a toy out of Cisco in about 2012, as video chat fills the early majority segment and edges against the late majority.

  1. leodirac says:

    @Trager – I wouldn’t say I missed the fact that the image quality is really good. I deliberately didn’t try to guess what aspects of the experience Apple would improve on. It’s more a prediction on faith that Apple would figure out whatever it takes to make the experience good.

    I know from personal experience that image quality is very important to a good video chat experience. Image quality has many aspects to it — resolution, compression artifacts, contrast, etc. all of which matter. Doing this whole thing well requires a huge amount of bandwidth and CPU power which I believe is fundamentally why it hasn’t yet caught on despite decades of serious attempts. In the iPhone 4’s case I would be very surprised if Apple’s not using dedicated hardware to speed up h.264 compression and decompression. An example of how economies of scale favor big companies as technology standardizes — Apple can afford custom codec chips for this stuff because they’re betting on big volume.

    But image quality certainly isn’t the only thing that matters. Good audio is also extremely important and also surprisingly difficult. If your video is perfect but the audio echos or lags, the experience is horrible. “Ease of use” is another very fuzzy but critical requirement. Latency is also critical. In a good implementation latency will be network limited, but that requires excellent work on the codec and transport layers.

  2. Trager says:

    The one aspect of iPhone 4’s implementation of video chat that I think you missed out on is the image quality. Computer based video chat is always small relative to the screen size, or pixelated. The crazy DPI and excellent speed of the iPhone 4 makes it as if you have a window to the other party in your hand. Hard to explicate, but it is a much more satisfying form of video chat than anything I’ve seen before. The dual cameras and ready ability to switch mid-call adds to this, by the way. It’s incredibly easy and natural to say “look at this” to the other person and share whatever you’re observing.

  3. At DreamWorks we co-developed and used what has become HP’s “Halo” video chat system — high bandwidth, high-definition, low latency chat on very large (wall-sized) HD screens in dedicated conference rooms. This is a spectacular system and miles ahead of any of the many Tandberg systems at Google. Still, we found ourselves traveling between the northern and southern California studios with some regularity, just for “high bandwidth”. There’s a lot of room for video chat to improve, with the ultimate goal always “just as good as being there”.

    Facetime, in addition to having a commercial that literally brought tears to my eyes, is an interesting bludgeon to use on the telcos. Apple is saying “if you guys can’t handle this much data on the cellular network, we’re just going to use 802.11x, and you’re not going to be able to sell those minutes.”

  4. leodirac says:

    I expect Facebook will build a video feature into their chat system soon enough. Having worked on the team that added video to Google’s existing chat system, I can tell you that it’s surprisingly difficult. Yes, the technology has been around for years, but doing it at all well is still a lot of work. My guess is that they’re hard at work on it right now.

  5. macpaul says:

    I think what really brought video chat into the living room was iChat and Apple including webcams on their consumer Macs, it’s already commonly used since it’s just an additional feature within instant messaging. Including it on the iPhone is going to increase use but I was pretty disappointed to find out it can’t be used on the cellular network (surely this was at AT&T’s request). Video chat will go completely ‘mainstream’ when you can make a video call from anywhere to anyone, including to people still on a PC. The biggest flaw in FaceTime outside of it’s WiFi limitation is that you can’t initiate a video conversation with someone on a PC or Mac, it would have been perfect for iChat integration and it would have really grown the social potential of video chatting, but perhaps we’ll get that in a new OS release.

    Speaking of social, I’m actually surprised that Facebook hasn’t made a meaningful attempt at getting on the videochat bandwagon, it’s a natural fit into their platform. Maybe it’s not on their current growth path though, which seems to be based on replicating the functionality of Twitter, Foursquare, and suddenly Yahoo Answers, around their massive existing user base.

    Sooner or later Facebook and Apple will butt heads, but whether or not it’ll be about video chat, I don’t know.

  6. cl3ft says:

    What it really means for the rest of us is that the teenagers on the train will no longer hold a phone to their ear and talk loudly, they will yell at their phone at arms length.

  1. [...] exactly what’s happening with video chat technology that I worked on at Google, as Apple pushes the technology into the early majority phase of adoption.  Crossing the Chasm is the name of a classic book on innovation by Geoffrey Moore [...]