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With this week’s release of the new iPod Touch with its apparent ability to support sound input, it seems rather clear to me that this is the SECOND step Apple is taking to create and provide VoIP based telco services to the world. The FIRST step, of course, was to release the iPhone.
Step one (the iPhone) was to simply provide a test bed for feeling out the appetite users had for using an iPod as a voice based communication device; effectively to see how well it would work. Of course, as we know, it has worked surprisingly well. It not only worked well, users were more than willing to pay through the nose directly to the telcos for the luxury of having the sweetest ’smart phone’ on the market. People will pay.
Now, while we all (or most of us) love Apple, it is still just a business that wants to generate large revenue. In order to get the iPhone successfully in the market, it needed to partner with the Telcos. Apple cut a deal with AT&T that saw Apple receive a monthly cut of each new contract it signed up. This was huge. When iPhone 3G was released, that contract was no longer in effect, but the telcos subsidised the phone because the opportunity to sign up subscribers was so big that it became cost effective. In both deals with the Telcos, Apple promised not to allow VoIP applications to provide service over their data plans. But, why would anyone use VoIP when they have a more stable cellular connection instead? This seemed like a win to the telcos…but of course, it was a win for Apple.
Shortly after Apple released the iPhone, they introduced the iPod Touch. A simple extension to their iPod line that would certainly not pose a threat to the telcos stranglehold on the iPhone…or would it? You see, when the telcos decided to subsidize the iPhone, bringing the price down by half that of the Touch the prognosticators claimed that it would ‘cannibalize’ the iPod line and Apple would have to drop their prices. Apple did drop the prices, but the iPhone is still cheaper. Why would anyone buy an iPod Touch when an iPhone is cheaper and it can make calls?
Why? Because Apple wants iTunes to provide VoIP services, and the Touch is its preferred means of placing voice calls. Right now, cellular subscribers pay about $100 per month for voice service and a data plan. Apple wants that reoccurring revenue stream and knows it can do it. It’s easy to imagine reloading your minutes through iTunes and getting billed by the second, with Touch-to-Touch(-to-Android?) calls which cost nothing.
OK, I know that some of you think I am crazy. Obviously you need a WiFi connection to place VoIP calls, so it’s not reasonable to expect people to buy into this idea. Well that is true for now. But if I think about my Touch useage habits, I am almost always near an open WiFi signal. I might be at home, at a friend’s house, or at work. It’s there. And if not, I am close to a phone. I know this is a limitation, and one I would be willing to live with for now. WiFi, in whatever form, will become more and more pervasive and openly available.
Steve Jobs started the home computing revolution in the early 80’s, dominated the MP3 player market and forever changed how we purchase and experience music (and soon movies) in the new millenium. The iPhone of course revolutionized smart phones. I don’t think it’s much of a stretch to think iTelco is already in the works.