Forget the iPhone 4: Facetime on the iPod touch

Facetime on the iPod touch is going to change everything. At the last iPod event, it was widely speculated (by me) that the iPod touch would get a camera addition. When it didn’t show up, the press (me) rationalized that Apple was worried it would cannibalize iPhone sales, since the major difference between the iPhone and touch is the phone, the camera, and the microphone.

But now Apple has Facetime, a technology they’re pushing so hard they’ve vowed to make it openly available to other companies in order to make it more popular. As an aside, this is a sly move on Apple’s part, since other companies that want to take advantage of it are going to have to offer front-facing cameras and screens as good as Apple offers or suffer by comparison—like how stores will put crappy, cheap TVs next to expensive, high quality ones to show you what you’ll be missing if you skimp.

So, Apple has to—let me underline this, has to—offer Facetime on the next iPod touch. This means they have to offer a front facing camera (and the alleged next gen iPod touch photos seem to bear this out). It also means they have to offer an internal microphone. Which, combined with a WiFi connection, makes the iPod touch into an internet phone.

I’m around a wireless connection almost all day, at home and work. The only time I don’t have a connection is when I’m commuting to work, but I live in a town which has a city-wide WiFi service to which I could subscribe, and when I travel I have a Boingo account that lets me connect to thousands of connections. Starbucks is offering free WiFi along with lots of other coffee shops. In addition, cell providers offer mobile hotspots (like the Sprint MiFi that lets you take a mobile connection with you. Combine any of those with Facetime or a free Skype account and you cut out a lot of need for an expensive phone contract, which charges you extra for data, and even more for tethering.

So, the iPod touch is going to become a VoIP phone, allowing Apple to neatly sidestep the two biggest complaints about the iPhone: AT&T’s service and the external antenna. If the profit margins are the same, and I bet they are, Apple won’t lose any money by losing iPhone sales. They can cut loose their dependence on AT&T (or any other cell provider, who seem more focused on nickel and dimeing customers than on providing amazing, next gen service). I’m not saying Apple is going to discontinue the iPhone, I’m saying they can turn the iPod touch into a replacement that they control completely.

The big question for me is whether the iPod touch will contain two cameras, front and back. I’m tempted to think it won’t; it will only have the Facetime camera, and Apple might have the stones to say that camera is only for Facetime, since taking pictures or video when you can only see the view screen while looking into the lens wouldn’t be the best experience. Then they might sell one with HD video capabilities…

Next year.