The technology for video calling (video phone, or picture phone) has been tried a number of times and been around for decades on POTS lines, what is actually quite ironic is that AT&T, the very carrier that Apple is partnered with for the iPhone was the developer of the AT&T Picturephone, circa 1960.  In the mid Sixties they started to appear in select cities but where discontinued in the late 60's.  Over more then a decade the company spend millions of dollars chasing a market that never existed.  

Putting aside the obvious technological limitations of the day coupled with high per minute cost its no wonder there was little to no public interest - that said are the technology advances of today with mobile platforms the sole deciding factor in acceptance of FaceTime or any other mobile or fixed video phone technology?  

More Irony, AT&T actually has a quasi-video phone feature, called Video Share which allows users to share real-time, or recorded video during a call with another user.  According to the company, Video Share users can 

"Show others what you see - a special celebration, sporting event, or celebrity sighting - when you see it.  Get on-the-spot buying advice, fashion consulting, how-to help and more"  

The service to my surprise has been available since at least 2007 as seen in the following clip from AT&T's own promotional link to the Tyra Banks show from December of that year: Video Share in action on The Tyra Banks Show

So how many of you know of the service and have signed up for it?  Just as with the iPhone 4 requires both users to have the same phone, users of AT&T's Video Share have to both be in a 3G city on compatible handsets with additional charges for the feature and per minute of use, see below.

Teens Prefer Texting over Voice Calling

There is a reason teens like texting, it allows as one teen told me "to not have that awkward silence" during a call, "with texting you can pace the conversation" when there is something to say. After the buzz of seeing your friend wears off, will this demo really find it more compelling to see their peers?  As seen in the chart below, teens prefer to text then to talk on the phone across ages from 12-17.

Fully two-thirds of teen texters say they are more likely to use their cell phones to text their friends than talk to them to them by cell phone, this according to the Pew study.

c. Pew Research

Teenagers and School use

According to Pew Research schools across the U.S. do not have a unified approach to cell phone use on school grounds, or the classroom.

35% of U.S. "tweens," defined as kids aged 8-12, own a mobile phone, and 5% access the Internet over their phones each month, according to a study (Dec. 2007) from The Nielsen Company.  How will school administrators  manage with student's making video calls during school hours even if this is not done while in class?  What about the potential for serious misuse with the case of pornography or other inappropriate behavior, could a video version of sexting take root?

Corporate lock down, camera's roaming the halls?

Platforms like the Blackberry 8830 exist specifically because corporations did not want their employees to be able to take still photos of sensitive materials during business hours, this would only be worse with a video capabilities during a phone call where corporate secrets could be transmitted outsides the walls of the company.

Analysts caution on the traction of FaceTIme at least in the short term.

Adam Leach is principal analyst at Ovum: "We shouldn't get too excited that it's going to be an overnight success," he says. "Look at video calling's long and miserable history - it was supposed to be the killer apps third-generation networks, but people generally don't use it. Behaviourally consumers have never really shown much interest."

Some news sites have been mostly positive even to the point of endorsement, mainly over the technology and Apple's ability to transform markets, for example:

First and foremost, because it will finally be available on a device that will achieve sufficient saturation among groups. Video calling is a social function and therefore there is a network effect in play. If not enough people have the capacity to make video calls, then even the people with phones that support video calls are out of luck.

While saturation is an important measure of the "ability" for usage amongst a particular group, it however is not a measure of the social drivers amongst different demographics in being a useful enough gauge as to platform success, whatever that means.

Second, because over wifi, FaceTime calls will look and sound good enough that they're worth making.

This is a counter intuitive statement to the point that sufficient saturation will be the main driver to platform success for FaceTime.  The fact that usage is limited to Gen 4 iPhone users in addition to those who will have access when and where they need it to WiFi networks.   While these factors are difficult to quantify numerically, no doubt it will be some time before there is enough Gen 4 users on ubiquitous WiFi networks to allow for spontaneous usage.

With pre-sales demand compelling enough that they crashed the AT&T sales network there is significant interest in a substantial phone upgrade.  That said, there will be a host of social and policy considerations that may limit FaceTime's use, especially in schools and corporate hallways.  It will be interesting to see if Apple's closed video sharing technology will gain traction amongst other Gen 4 users and if it will spur other device manufactures to create their me to versions of FaceTime?