Silicon Valley News

Friday, November 5, 2010

FaceTime Apple's top trendsetter

If you like tech stocks, and you decided to invest in one of the stocks listed on the tech-laden Nasdaq exchange about a year ago, chances are you would have made some money. The Nasdaq has gone up 25 percent over the last 12 months. If you wanted to invest in a company with growth potential but you're an older investor, like me, and wanted to keep your risk to a minimum by investing in one of the larger tech companies, Apple would have been a good choice. Apple's stock has outperformed the Nasdaq by over 41 percent during this period and the company is now the largest tech firm.

Apple stock has risen 66 percent this past year

As the new year approaches, you older investors aren't getting any younger. Apple is still a growth stock and, I believe, the risks are few. Apple is still the number one trendsetter in the tech world. It ascended to the Nasdaq throne on the coattails of the trendsetting iPod, iPhone and iPad. Apple's most important innovation, I believe, is still in its embryonic stages. That would be FaceTime, the video chat technology that could turn out to be Apple's crowning achievement.






FaceTime has redefined video chat in much the same way that the iPod changed music players, the iPhone transformed the smartphone and the iPad blazed a new tablet trail.

Since its release in early June, Apple has  made FaceTime the chief selling point of the popular iPhone 4. At the time, Apple chief executive Steve Jobs set a goal of selling "tens of millions of FaceTime-capable devices" this calendar year. By September, Fortune magazine was predicting that 48 million FaceTime-equipped devices could be sold by the end of the year.

With the addition of FaceTime to the iPod Touch and Mac computers, these predictions appear to be coming true. When introducing FaceTime for Mac in October, Jobs said that in the previous four months, 19 million FaceTime-enabled devices had been shipped.

Apple's popular video chat feature will be the chief catalyst that drives the company's stock much higher, predicts Benjamin Reitzes of Barclays Capital. "Long-term, we are excited about Apple's potential to grow via network devices through FaceTime," said Reitzes. "Even at this market cap, we continue to believe Apple is the best growth play in the IT hardware segment."

OmniVision will supply image sensors for the second-generation iPad, which will ship early next year, according to the investment firm Detweiler Fenton. The research firm said that the new iPad will have two cameras that will likely support FaceTime.

A recent report by In-Stat projected mobile video calling revenue of $1 billion by 2015. "The market for mobile video calling is hardly new," notes Frank Dickson of the mobile internet division. "What is new is implementing mobile video calling over IP in a significant way. Apple's launch of the iPhone 4 and FaceTime marks the point at which the competition for mobile video calling dominance began in earnest. Apple's capability to revolutionize the mobile calling market is very real and no one in the ecosystem wants to be left behind."

VoIP pioneer Skype was the company generally associated with video chat before FaceTime arrived. However, Skype does not, as yet, have a smartphone video chat app. The company stepped up its game earlier this month, though, by releasing its Skype 5 beta for Mac, which features the ability to make group video calls.

Qik, a small company in Silicon Valley, offered mobile video calling long before FaceTime came on the scene. Earlier this month, T-Mobile and Qik teamed up to bring integrated video chat to the MyTouch 4G Android smartphone. T-Mobile also started airing a commercial poking fun at the AT&T 3G network for not supporting FaceTime. The Apple video chat service is only available on WiFi networks.




In October, Yahoo entered the video calling frey. Yahoo's Messenger App for iPhone, which includes video chat via WiFi, was launched.

Scheduled to be released later this year, Google Android 3.0, codenamed Gingerbread, will feature support for video chat. Google Chat is presently restricted to computer to computer voice and video calling.

A year-old Silicon Valley startup named Tango recently launched a cross-platform video calling service that works over WiFi and cellular networks. The Tango service is available via a free app from the Apple app store or the Android Market.


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