Steve Jobs unveils iPhone 4 — and its video calling feature


Seeking to keep its edge in the smart phone market in the face of new competition, Apple Inc. on Monday unveiled its latest iPhone, equipped with mini cameras on front and back to allow for video calls.

Apple Chief Executive Steve Jobs, ever the showman, demonstrated the new video telephony program, dubbed FaceTime, by using the new iPhone to place a video call to another Apple executive.

“I grew up with ‘The Jetsons’ and ‘Star Trek,’ just dreaming about video calls,” Jobs said to the crowd gathered at the Moscone Center for Apple’s annual Worldwide Developers Conference. “And it’s real now.”

The iPhone 4, as it’s called, is a slimmer, faster version of the blockbuster phone, encased in steel and extra-durable glass and boasting a screen with a resolution quadruple that of the previous model.

“This is the biggest leap we’ve taken since the original iPhone,” Jobs said.

The phone, which will be available in stores June 24, will cost $199 for the 16-gigabyte version and $299 for the 32-gigabyte version if purchased with a two-year plan from exclusive carrier AT&T Inc. The phone prices are substantially lower than the $599 price tag on the first model, which was released in summer 2007.

The new iPhone 4 will also have a built-in gyroscope to give the device the ability to determine, with much more accuracy, which way its screen is facing. Previous versions have accelerometers.

“These phones are getting more and more intelligent about the world around them,” Jobs said.

The new phone came after months of speculation about the features it would contain, much of it fueled by photographs and details of a prototype unit that wound up on the Internet in mid-April — after the device was left in a Silicon Valley bar. (In a nod to that leak, Jobs began his introduction by joking, “Stop me if you’ve already seen this.”)

Jobs’ presentation brought into focus the video capabilities of the new phone, with one of its built-in cameras capable of high-definition video, its higher-resolution display and its video-calling functionality.

Though the new iPhone is not the first to allow video calling (Sprint’s HTC Evo 4G, launched Friday, most recently beat Apple to the punch), analysts said an endorsement by the world’s largest technology company could propel video telephony into the mainstream.

“Apple has the splash and dash to really bring this new technology to the attention of more consumers,” said Alfred Poor, an analyst with GigaOM Pro. “It’s only going to speed the adoption.”

The GigaOM Pro research group released a study this month predicting that the number of people worldwide who make mobile video calls will triple to 10 million by next year and reach 143 million by 2015.

There was a pair of caveats about video calling on the iPhone, however. Users of the new iPhone will be able to make video calls only to one another — calls to online video services such as Skype will not be possible, at least for the time being. Also for now, users will not be able to make video calls unless they are in a Wi-Fi Internet hot spot.

That Wi-Fi limitation may have to do with the heavy stress that video would put on AT&T’s wireless network. Transmitting and receiving video is one of the most data-intensive uses of smart phones.

Last week AT&T announced it would limit customers’ use of wireless data and impose fees on the heaviest users. The new Evo phone has an advantage over the iPhone in that it can make video calls on Sprint’s 4G cell network that’s being rolled out across the country.

In an aside before the iPhone announcement, Jobs also mentioned that Apple’s iPad tablet was making quick inroads in digital publishing. Released eight weeks ago, the iPad and its iBookstore have sold more than 5 million books, Jobs said. That amounts to about 22% of the e-book purchases being made from five of the largest U.S. publishers.

Apple’s carefully planned product announcements are known for coming off without a hitch. But not this time. When Jobs attempted to load a Web page on the new phone, he got a network error — perhaps because many in the audience of technophiles were on the building’s Wi-Fi network. With them sucking up the bandwidth, there might have been none for Jobs.

“Boy, I’m sorry, guys,” Jobs said. “I don’t know what’s going on.”

“Scott, you got any suggestions?” he said, seeking help from Scott Forstall, Apple’s vice president of iPhone software.

“ Verizon!” someone in the crowd yelled, a jab at Apple for not offering the iPhone through the nation’s largest cellphone service provider.

Many in the audience laughed. Jobs did not.