What Apple's FaceTime app means for Skype

As time ticked on in Steve Jobs' keynote at Monday's WWDC conference, we kept waiting for the Apple chief to showcase the iPhone 4's front-facing camera. When he finally did, it wasn't a Skype video conferencing app that many expected, but Apple's own software, called FaceTime.

FaceTime is built into the version 4 operating system that Apple is now calling iOS 4, since it powers the iPhone, iPod Touch, and iPad. Using the front-facing camera, two callers will be able to see and hear each other in a high-definition video call. 

The good news is that FaceTime will require no setup, so firing up video chats should be intuitive even for VoIP novices. Here's the setback: at launch, FaceTime will run only over Wi-Fi, and only on the iPhone 4. 

We understand that hardware and software requirements like a front-facing camera and HD video recorder would cause Apple to limit FaceTime calls to between iPhone 4 phones, but we are surprised that Apple isn't taking advantage of 3G calling, particularly since it's been six months since the company allowed third-party developers to add 3G calls to VoIP apps.

The bigger question on our minds, however, is just how big a blow FaceTime will deliver to Skype and other competing VoIP services.