The MMS software reports indicate to some observers that the next iPhone (due out July 17, according to some speculation) could support iPhone video chat, which would be possible with a good camera and microphone and a fast wireless connection.
There are some other factors to consider. First, the iPhone would need to have either a front-facing camera or a "periscope" type of mirror to bring the camera view over the top of the iPhone. Next, the hardware for video encoding/decoding would have to be pretty significant. You’ll recall that even some older Macs have trouble with the more advanced features of iChat Video (below). We expect to see a faster processor and new architecture in the upcoming iPhone, but aren’t sure that it will be able to produce the kind of quality encode/decode that Apple would expect.
Also, while AT&T’s network has the capability for high download speeds and is even moving to double-fast 7.2Mbs speed, video chat also requires significant upload bandwidth. It is already being done on various platforms but Apple, being Apple, would want a higher quality experience with higher quality video.
HSDPA, the wireless standard that AT&T’s 3G uses, stands for High-Speed Downlink Packet Access. The current uplink speed is 128K. While this is theoretically able to handle 160×120 video (above), we all know that theoretical speeds and real-world speeds often don’t mesh. We also know how much AT&T likes video applications on its network (see Sling). In this regard, Apple could make a service that only worked over Wifi. Like Sling’s dilemma, this would eliminate the whole purpose of having an "anywhere device".
Lastly, does it fit within Apple’s strategy? Perhaps long term, yes. But Apple hasn’t even brought iChat to the iPhone platform yet. While you can IM with a number of third party applications, Apple hasn’t made even the first move to bring its own client to the iPhone. An iPhone iChat client would be the first step in setting up a video conferencing ecosystem that allowed you to video chat with people on Macs (Apple would have to include this, right?).
The Computerworld articles mentioned third parties. Perhaps Cisco or Skype or some jailbreakers will make an effort to build video chatting into an application (remember Cisco is part owner of the iPhone trademark and has promised to take advantage of software development on the iPhone). But without Apple’s blessing both in building a front-facing camera and allowing video chat capabilities into the App Store, it likely won’t go far. In fact, there are already video chat apps floating around on jailbroken iPhones.
So video chat on the iPhone? In our opinion, not likely, but we’d love to be surprised.