Updated from 12:11 p.m. EDTSkype's imminent availability at Apple's ( AAPL) App store has set off speculation that long-awaited video conferencing capabilities are just ahead for iPhone users. To date, the iPhone has lagged the pack in the camera race. The current iPhone features a meager 2-megapixel camera and no video capture. Research In Motion's ( RIMM) BlackBerry Curve and Storm have 3.2-megapixel cameras, as does Deutsche Telekom's ( DT) T-Mobile Google ( GOOG) Android G1 phone. Speculation about some of the key features on the new iPhone has included a first-ever video camera, and the possibility of two cameras, one on the front and one on the back. Now, with Skype ready to start offering its iPhone software Tuesday, there's anticipation that a front camera would let users do a Skype-powered video chat on the iPhone. It's a juicy rumor, fueled in large part by the rising expectations ahead of the CTIA wireless industry show starting Wednesday. But brace for a letdown. Video and wireless continue to be among the hottest convergence points in technology. This intersection, however, has often been the scene of a few major duds and disappointments -- e.g. Verizon's ( VZ) VCast video clip service, mobile TV, etc. Skype, the Internet calling unit of eBay ( EBAY), along with Time Warner's ( TWX) AOL and Google's Chat service, has taken broadband connections and allowed millions of users with Web cams make video calls to other service users for free. Not only is the price right, the novelty of seeing the person you're calling has helped Luxembourg-based Skype take its popular phone service into the booming video segment.
Skype is huge, no question, but it has yet to thrive on mobile devices. For one thing, it is WiFi dependent and therefore less like mobile and more like hotspots and therefore limited. And here's where the connection gets lost: Apple already tipped its hand on its chat plans with its iPhone 3.0 introduction earlier this month. Apple demonstrated through Meebo a push system to deliver messages upon sending. Apple said the push method will save two-thirds the power over a other instant messaging applications like iChat, Skype Chat or AOL IM. None of the preview pictures of Skype's iPhone application include any indication of a video chat feature. It does, however, make sense, that Apple will add video capture to the existing camera and integrate it with Google's YouTube. Already a leader in delivering YouTube videos to mobile phones, it would stand to reason that Apple will make it easier to edit videos and upload them directly from the iPhone to the Web. To borrow from a recent Microsoft ( MSFT) campaign: Skype just isn't cool enough to do video on the iPhone. Ebay shares closed Monday down 2.9% to $12.48. Apple shares were off 2.2% to $104.49.