Apple unveils iPhone 4, touts 'FaceTime' video chat

Computerworld - Apple today unveiled the iPhone 4, touting it as the "biggest leap" since the company's original model of 2007 and saying it would go on sale in the U.S. and four other countries on June 24.

"This is more of the kind of enhancements they usually do, and none of them is a blockbuster, but I agree that it's the biggest step since the [2007] iPhone," said Ezra Gottheil, an analyst with Technology Business Research.

The debut of the iPhone 4 and the availability date for iOS 4, the new name for what the company had called iPhone OS 4, came at Apple's Worldwide Developers Conference (WWDC), which CEO Steve Jobs kicked off Monday in San Francisco.

Jobs covered several of the new smartphone's and operating system's features, including a much sharper display, Apple's new iAd mobile advertising platform, and video capture and video chat.

The last was saved for Jobs' now-famous "One more thing..." near the end of his time on stage, when he placed a video call to Jonathan Ive, Apple's head of design. "You know, I grew up with the Jetsons and video calls," Jobs said to Ive. "And now it's real."

Dubbed "FaceTime" by Apple, the video chat feature works only between iPhone 4 smartphones, and during 2010, only via a Wi-Fi connection on each end. "We need to work a little bit with the carriers" before video calling can migrate to cellular data networks, Jobs admitted.

"They're positioning this as completely divorced from all the other video chat that's out there," said Gottheil. "They're positioning this as something completely different from, say, the Skypes of the world." Even so, Gottheil expects that Apple will provide video chat links between the iPhone and its desktop-bound Mac OS X client, iChat, in the near future.

"Apple wants to build a wall around [its] own ecology," said Gottheil.

The 32GB iPhone 4 will sell for $299; a 16GB model will go for $199. Both will be sold by Apple and AT&T at brick-and-mortar and online stores, and at Best Buy and Wal-Mart stores. Apple is also retaining the 8GB version of the iPhone 3GS, and starting June 24 will sell that older model for $99.

All iPhones sold in the U.S. require a two-year commitment to AT&T service. AT&T, however, will waive its usual contract restrictions and allow any current subscriber who would be due for an upgrade in 2010 to purchase an iPhone 4 starting this month.

Apple will take pre-orders on the iPhone in the U.S., France, Germany, Japan and the U.K. beginning June 15, and start selling them in those same countries nine days later.

"People are going to go out and buy this thing in droves," said Ken Dulaney, an analyst for Gartner Research. "Apple will get not just the additive buyers, but also the repeat customers," he said, pointing out the waiver AT&T is giving subscribers.