iChat AV could become ‘nothing short of catastrophic’ for the Baby Bells

Alex Salkever is baaaack… asking, “with iChat, who needs a phone?” Salkever is alternating with Charles Haddad on Byte of the Apple for BusinessWeek.

“Apple’s latest tech wizardry makes voice calling over the Net a snap. That could be a push off a cliff for today’s telecom giants. Give Steve Jobs credit. For a man who heads a comparatively small technology company, he sure knows how to alter the tech landscape,” Salkever writes. “…the phone companies are about to get whacked by Jobs’s quest to give Apple users something else they want. I’m talking about the latest beta version of iChat. Released in late June at Apple’s World Wide Developers Conference, the new version lets iChat users go beyond typed text messaging to actual voice conversations over the Net.”

Salkever writes,”iChat has several insanely great things going for it. Installation is painless, in the Apple tradition. Also very Apple-like, the system works flawlessly right off the bat. And it coexists easily with a popular existing function, instant text messaging. The voice quality is just a notch below regular phone service and several notches above cell-phone connections. Unlike most other software designed to let people speak directly to each other over the Net, iChat is ‘duplexed.’ That means if two people talk at the same time, they can still hear what the other is saying because the connection can handle traffic going in both directions simultaneously.”

“In the past, Apple has contributed to big technological shifts such as introducing the graphical user interface to consumers and, more recently, creating a viable platform for digital music sales online. If past is prologue, then Jobs’s latest innovation could hasten a coming age when anyone who wants to can use their PC to bypass traditional phone services,” Salkever writes.

Full article here.


  1. As technology advances change the way people communicate I believe the “Baby Bells” will also have to transform from the traditional services they offer. As the internet becomes a more and more viable means to delivery audio and video, it will be used more and more heavily in this capacity until it is the industry standard. I fully expect to see HDTV channels you tune to using an Internet connection in the future. HDTVs that get they “signal” from the internet will change the television landscape forever with content on demand, basically unlimited channel allocation and interactivity. I also don’t think that it would be too outrageous to think that in the future most communication will travel via the internet in some way.

    As this transformation happens, I believe that Phone and Cable Companies in the future will transition themselves to be in the bandwidth and ISP business. Think about it even if I want to use iChat AV for all of my communications I still need my DSL line to do it; and guess where that comes from?

    By the way the “Baby Bell” charges me only $15 for the phone line and $45 for the DSL line. Phone doesn’t include long distance but I can’t remember the last time I spent $30 a month on long distance. No problem for them short term. But down the line when a large company uses a the latest fastest high-speed internet connection to replace 10,000 phone lines now your talking. I can’t remember where I saw it but I think in was an Oracle ad that talks about a Fortune 500 Company saving a million dollars a day by simply using Internet and Intranet phones.

  2. Waiy till the telecoms companies start to feel the pain. The the story will be iChat RIP as telcos get their governments to enforce telecom licences on Apple.

  3. i think 2 things will make iChat ever more popular

    1. make iChat available for windows users
    2. make iSight a little cheaper

    then iChatAV+iSight will be just like iPod and take the world by storm!!!!

  4. iSight is cheap enough. You cheap bastards always calling for more for less should go get a Dell and shut your pie holes – you can’t understand quality costs more, Ford drivers. So, you don’t deserve quality.

  5. I’ve seen this stuff about the phone company dying before. PC’s have software to talk to each other over the computer. They’ve had it for years. My brother in California talks to my sister in Prague. Why would iChat be any different?

  6. Jeff, I think this will make more of an impact than options in the Windows world for a few reasons.

    1. The quality (so I’ve heard) is higher. The audio allows flawless simultaneous two-way chat at higher quality than speaker phones. I’ve tried this both over broadband and a 56k modem with no problems. I’ve only heard excellent user reviews on the quality of the performance of the iSight camera. This isn’t your ordinary web cam.

    2. The software is brainless to use. iChat automatically detects what types of chat (audio/visual) your buddies are capable of and changes the icon in your buddy list to match. Clicking on the icon starts an audio or video chat, depending on whether it’s a video camera or a microphone icon. There’s no IP configuration or frustrating settings. Simple and elegant.

    3. The A/V software is built into iChat. Text messaging, audio, and video is available all in one application. I realize there are several voice or video applications on the windows side, but often they are independent of each other, requiring a different application for each one.

    4. iChat comes with the OS and is used by many Mac users. On Windows, you have to independently download or purchase text massagers, video conferencing, or audio chat applications. This means that Windows users might not know that these software solutions exist, and that these extra features (audio and video) will not be used mainstream, or at least to a great degree. On the other side, iChat comes bundled with the OS (iChat A/V will be included for free with Panther). Users can see it in the applications folder, and can try it out if they’re curious. iChat is an iApplication. If you read tech news, Apple gets a lot of coverage on their excellent iApps. This means the ratio of computer users who know of iChat A/V is probably greater than the ratio of computer users who know of Windows audio and video conferencing solutions. This also means that the ratio of Mac users who know of iChat A/V is greater than the ratio of Windows users who know of Windows audio and video software. In summary, because this is an iApp, and is receiving heavy promotion from Apple and other tech news sites (compare the number of articles on iChat A/V with the number of past articles on independent Windows audio or video chat software), this program will have a much higher profile than similar Windows programs, and will enjoy more success than its Windows counterparts.

  7. Jeff Axeline: “… Why would iChat be any different?”

    PC solutions have not achieved the simplicity or the quality of the Apple product. The major stumbling block has been the audio ~ they have yet to get it right. iChat AV has full duplex audio that surpasses my speaker phone.

    Tying it to the IM client makes wading through the wanker whackers unnecessary. It’s perfect for family or business use. This is the Killer App that Apple needs to put an iBook on every desk.

  8. Andrew-
    Lets say iChat is the hottest thing on the Mac since Quicktime. Lets say half of all Mac users use it. My first assumption would be half of 3% of the computer market. 1.5%. It seems that you are making many assumptions about the PC market. “NetMeeting delivers a complete Internet conferencing solution for all Windows users with multi-point data conferencing, text chat, whiteboard, and file transfer, as well as point-to-point audio and video” Much more than what iChat delivers. I’m not knocking Apple or iChat. I’m just pointing out that this stuff isn’t new. It’s just new to Mac users. I am sure that not that great a percentage of PC users know how to use this type of software. I also know that the amount of people who do outnumber the total Mac population.

  9. iChat may be much better than their windows counterpart, but why would it be more of a threat to phone companies? The number of people who will use iChat will be a miniscule percent compared to the population that use phones.

  10. Mac has around 10% share of installed base of personal computers that people are using with keyboards daily (ie. not servers and dedicated machines running specialized apps). The 3% market share figure is from last quarter and is meaningless since Macs are replaced on average once every 3 years vs. 1.2 years per average PC. macs last longer. Also, from the linked article:

    “Let’s do the numbers. America Online (AOL ) alone has 350 million users on its two IM services, AOL Instant Messenger and ICQ. Several technologists have told me that what Apple has done, while technologically sophisticated, wouldn’t be hard for other IM services to replicate. In fact, iChat and AOL IM are already compatible. iChat users show up on the buddy lists of AOL IM users and vice versa. Give all those users an iChat-like voice capability, and all of a sudden you have a phone network with more than 350 million users.”

    “These number don’t include Yahoo and MSN’s IM customers. If at some point those two interconnect with AOL’s dominant IM network, the tally would likely eclipse 500 million. And once word gets out that you can have free phone service simply by signing up for IM, I guarantee millions more people will come aboard.”

  11. Jeff –
    You know that market share isn’t equal to installed user base. I believe Apple computers make up a greater installed user base than 3%. Yes, the number of people who know about Windows video and audio conferencing software probably does outnumber the Mac using community. However, I was pointing out ratios. No, I don’t have solid fact or data to back me up. I’m just trying to make an educated guess, and the numbers just feel right. There’s a ton of Windows users out there. Most of them don’t give a damn about video or audio conferencing. Apple’s major releases are high profile. There’s articles on the WWDC software and hardware releases on nearly every tech site.

    Anyway, back to the point, right now the service is limited to just iChat. Imagine what these numbers will expand to if AOL, Yahoo, and/or MSN decides to hook up with this. Some of these services already have some degree of audio or video chat. Apple could always be the initiator here and try to adapt to their services too (rather unlikely, however).

  12. “Mac has around 10% share of installed base of personal computers that people are using with keyboards daily”
    How many of these can even run iChat? It needs horsepower.
    “Give all those users an iChat-like voice capability, and all of a sudden you have a phone network with more than 350 million users.”
    Therein is the key. iChat like capability. Not iChat. The title at the top of the page says “iChat AV could become ‘nothing short of catastrophic’ for the Baby Bells”. I think it should read “Video conferencing could become ‘nothing short of catastrophic’ for the Baby Bells. A grandiose title from the author.

  13. iChat AV is another great showcase of QuickTime technology but it would make more of an impact with Windows versions (just like the rumoured iTunes for Windows) and mobile phone compatibility. Apple is allready working towards this if iSync is any indication.

  14. “The 3% market share figure is from last quarter and is meaningless since Macs are replaced on average once every 3 years vs. 1.2 years per average PC. macs last longer.”

    SO TRUE!

    This is one of the most under-reported facts in the industry.

    One of the many reasons that the Wintel camps oh so tired “MACS COST MORE” rants is so pathetically amusing to multi-platform users who know better.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.