How the iPhone 4 will change online video

Like many others, yesterday I huddled in line for close to 11 hours to pick up the coveted iPhone 4 (much to the chagrin of my wife, I’ll add). After playing with the phone now for half a day, I’m more convinced than ever that this phone is going to have a meaningful impact on the online video world.  Here are just a few initial predictions:

  • More people are going to want to watch video on their phones because of this phone. Watching video on the iPhone 4 is actually pleasant.  While video on the older iPhones was a ‘game changing’ step forward in terms of quality, the higher resolution screen of the iPhone 4 pushes it to a new level.  Even skeptics are going to have a very difficult time arguing that the quality improvement made possible by such rich pixel density doesn’t make a significant and noticeable difference when watching video.
  • HD video recording for the masses will drive user generated video into a ‘new era.’ The iPhone 3GS brought video recording capabilities, yes, but the 3GS was always a ‘stepping stone’ phone for Apple and its users.  It certainly didn’t generate the same level of excitement in the market as the iPhone 4.  When waiting in line to get my hands on the phone, one of the things that immediately struck me was the diversity of the crowd.  It wasn’t just a bunch of programmer geeks, design snobs, and urban hipsters that one might expect to show up for an Apple Fanboy rally.  People from all walks of life were represented.  The guy standing in line behind me was a landscaper who said, “I’ve never geeked out this hard for anything in my entire life.”  That sentiment was repeated over and over again when I asked others in line about their attitude toward the phone.
  • FaceTime will advance the cause of interactive video. Apple has outdone itself with FaceTime, but there are major problems with this service.  Everyone knows about the wifi only limitation, but I’d argue that’s not the biggest issue (the iPhone released next year will probably solve it anyway –  phones like the HTC Evo 4 already support video calling over 3G).  To me, the bigger issue that that in order to participate in a FaceTime conversation, the receiver of the call has to be an iPhone 4 user.  If video calling becomes the ‘killer app’ of mobile, this could prove a critical misstep for Apple as it squares off against rapidly improving Android phones that take a more open approach.  I’m sure we’ll soon see video calling on iPhone for Skype and many other uses for the front facing camera in the App Store, but FaceTime itself needs to be more open.  The mobile world is moving toward more open standards.  If Apple isn’t careful, it will become a niche player in the smartphone market while Google becomes the Microsoft for mobile phones.  The PC v. Mac battle tells us that it’s the more open standards that usually win.

Whether the ultimate impact of the iPhone 4 on online video is large or small, the phone clearly sets a new benchmark for video playback on a smartphone.  This quality is sure to drive more mobile video consumption and push other device manufacturers to build more video-friendly displays.

Even if FaceTime ultimately loses out  to more open approaches, enough people will use it (and enough other smartphones will launch competing services) that retailers will need to seriously consider possible uses (customer service calls, shopping assistance onsite, more mobile video reviews).

And finally, the macro-trend, the one of an ever-expanding mobile audience, is one that online retailers ignore at their own peril.  Consumers want video, and if my 11-hour wait in line yesterday is any indication, they also want the iPhone 4.

Until next time,

Happy Selling!