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JULY 9, 2003
By Alex Salkever With iChat, Who Needs a Phone? 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. The exuberant and often exasperating CEO of Apple Computer (AAPL ) gave the music industry its groove back in April when he introduced a powerful one-two punch of iTunes and the online Apple Music Store. With 99-cent downloads, Jobs also handed music lovers what they wanted: high-quality downloads, a fair price, a good selection, and the right to do what they see fit with their music. With 5 million paid downloads in two months and a version for Microsoft (MSFT ) Windows users on the way, it's easy to see why music industry execs are dancing in their boardrooms. While the record labels have been a lucky benefactor of Jobsian innovation, 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. All you need is a Mac running OS X, a decent external microphone, and a connection of 28 kilobits per second or so. A broadband link isn't necessary. (This version also lets iChat users establish on-the-fly video calls with others on the iChat system, but the video isn't nearly as impressive as the voice capability.) I tried talking to someone in Amsterdam who was on a narrowband connection. He couldn't do much else on the computer when he was talking, but the iChat connection held up very well. On all broadband links, iChat has worked without a hitch for me. TWO-WAY TRAFFIC. In fact, I feel 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. I was also highly impressed with iChat's ability to carry streaming traffic through not one but two firewalls that guard my connection. These beauties keep the hackers out, but they often disrupt streaming-media services. Apple has built a neat work-around that lets my system instruct the iChat servers about which ports are open on my firewalls and allow streaming voice traffic to go in and out. NO COSTLY BELLS. Best of all, iChat lets me bypass the phone company. For the few people on my instant-messaging buddy list who have iChat, I don't pick up the phone anymore to talk to them. I simply look to see if they're available and, if they are, I click on the voice connection button in iChat. A few seconds later, I have the equivalent of a phone line. If everyone on my IM list had the new version of iChat, I would think very seriously about dumping my wireline phone service. Just give me a cordless headset to connect to my Mac, and my IM will supplant the phone almost entirely. Take this one step further, and it's not so farfetched to imagine that the various IM systems from America Online (AOL ), Microsoft (MSFT ) and Yahoo! (YHOO ), among others, will quickly morph into major competitors against the lumbering telecoms. And it will hasten the day when Internet users can set up their own phone service, or at least something that functions as phone service does today. All they'll need is a dumb pipe connected to the Internet with no costly bells and whistles attached. Everyone agrees that communications using packets of data typified by the Internet will ultimately replace the circuit-based system used by the legacy phone network. All the big telecom providers are busily switching from networks built largely to handle dedicated circuits for voice calls to vastly more efficient and flexible networks that handle voice traffic in bits and bytes, just like data. But their efforts presuppose a paradigm where they'll continue their role as the middlemen who route all calls.
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