Will mobile video chat ripen with Apple’s help?

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Mobile video chat was already a commercially available application before this week’s launch of Apple’s iPhone 4, but as the iPhone has done for so many other apps, the latest version of the device stands to dramatically raise the profile for mobile video chat.

Whether or not mobile video chat usage is ready to go mainstream remains to be seen. Immediately following Apple’s iPhone 4 announcement, some observers were quick to declare that the device’s enhanced camera support for video apps could trigger an market explosion for video chat. But others noted that the new Apple FaceTime video chat app is neither first to the party nor fully positioned to capture the broadest possible appeal.

That’s because for now, FaceTime remains an app that works only over Wi-Fi and only between two iPhone 4 devices, undoubtedly limiting potential usage of the chat app. The decision to stick with Wi-Fi only makes FaceTime more a stationary app and not really a mobile one at all, whereas other chat apps from players such as Skype and Fring work over both Wi-Fi and 3G mobile networks.

The prospect for greater mobile video traffic could be a source of both excitement and concern for mobile carriers. It promises a boost for mobile data revenues, but after AT&T’s much-publicized problems providing adequate network support for previous generations of the iPhone, there could be concerns about being able to support mobile video chat and other mobile video apps at a consistent quality level. Apple CEO Steve Jobs said during the iPhone 4 announcement that the company was still working out details of supporting video chat on 3G networks.

Matthew Vartabedian, vice president of research for consulting firm iGR, said, “People want a good experience. [That means] low latency, an image that is reasonably crisp and can handle some re-sizing, with little or no voice distortion.”

Because mobile video chat apps are still in their infancy and not yet widely used, the app has yet to put carrier networks to any real bandwidth test. However, just last week, with the launch of Sprint’s Evo 4G mobile phone over the carrier’s WiMax network, mobile video chat provider Qik experienced server problems, as both the sales of the phone and downloads of the Qik app came at a more rapid pace than expected.

Overall, however, 4G networks, and particularly long-term evolution (LTE), will be better positioned to support the rise of mobile video chat and other apps enabled by devices like the iPhone 4. “Migration to 4G would alleviate many of the network concerns since LTE and WiMax both offer much lower latency and much higher bandwidth than existing 3G networks,” Vartabedian said, adding the even HSPA upgrades to 3G networks — something AT&T is focused on doing this year — could also help. For now, it remains unclear how long it will be before Apple and AT&T are ready to put the iPhone 4’s video chat to the test on any mobile carrier network, whether 3G or 4G.