More Video Apps Come Calling Despite Unclear Market Opportunity

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There’s been a lot of fast followers jumping on the video-calling bandwagon since Apple (NSDQ: AAPL) released the iPhone 4 with FaceTime (NYSE: TWX) and launched a multi-million advertising campaign designed to tug at your heartstrings. Qik, Tango, Yahoo (NSDQ: YHOO) and incumbents such as Skype, are all now getting recognition to provide video-calling alternatives that work across multiple platforms, including PCs. However, new research released today by Juniper predicts that there will be only 29 million smartphone video users in 2015, a number being held back by the lack of interoperability between different devices.

Yahoo, one of the early providers of video-calling on the web, announced today it is rolling out the latest version of its Messenger App on the iPhone, which gives users the ability to make free video and voice calls with Messenger contacts.

Last week it was announced that the same app was going to be available for the new T-Mobile myTouch, an Android phone coming out later this year. Unlike with FaceTime, Yahoo’s chatting capabilities are available over both 3G and WiFi networks. It also can receive or make calls to someone sitting at a PC, or using a different operating system. However, it does not integrate with a user’s address book, but rather users must login to the app separately.

Similarly, another company that’s getting a lot of buzz is Silicon Valley-based Tango, which has designed its video-calling application to work over cellular or WiFi networks on multiple phone platforms and PCs. Skype and Qik also have various offerings and partnerships.

It seems the key to adoption will be tight integration with the phone, including the address book, and interoperability between phones. Just this past week, I saw two people out in the wild using their phones to FaceTime with their children back at home. Without that level of ease of use, the mass market won’t make it a habit to video chat, rather than to just make a call, as Juniper’s research implies.

However, there’s another opportunity, too. If you remember, when Apple announced FaceTime back in June it said it was going to make it an open standard, meaning that it can be adopted by any handset manufacturer or carrier. So far, that hasn’t been the case. T-Mobile penned a deal with Yahoo; Verizon Wireless has a deal with Skype and Sprint (NYSE: S) has integrated Qik on the EVO 4G to enable video chat.

Another analyst sees video calling taking off. Analyst Alfred Poor estimates in research released by GigaOm Pro that approximately 3.2 million consumers will have access to mobile video chat in 2010. Poor believes that number will grow almost 50-fold in the next five years, to an estimated 142 million consumers.

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Michael Troxler

It’s only been 2+ years and the burgeoning app market seems to be doing one clear thing to the prospects of ubiquitous mobile video chat – killing it slowly through fragmented support.

Granted – the only thing that was driving 3G Video Calling in 2008 was adult chat (and still is) – – but at least there was handset native standards-based support across carriers – with common off-net billing mechanics to boot. Mass adoption of video calling in the UK and elsewhere failed due, primarily, to the inability of the carriers to convey the consumer proposition effectively. Carriers – not device manufacturers or app service providers – should be taking a more aggressive and central role in agreeing standards and interoperability to limit fragmentation and develop a clear consumer proposition.

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