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Skype facing up to FaceTime threat

Apple's development of its own video-calling service has Skype worried, according to a filing from the company that shows mobile is now very much its focus

Free call provider Skype is looking anxiously over its shoulder at Apple's new FaceTime video-calling service, a company filing reveals.

Although Skype is available for the iPad, iPhone and iPod touch, Apple and mobile networks reserve the right to change the terms of inclusion in the app store. The company warns in an SEC filing, seen by Network World, that Apple and its carrier partners are capable of "effectively withdrawing this functionality at any time or develop[ing] competing applications, such as Apple FaceTime, that may better integrate with Apple devices."

The filing expressed concern over the development of FaceTime, despite Skype having already built functionality into its iPhone app to ensure it works with the iPhone 4's front-facing camera.

The new iPod touch, due out later this year, may also carry the ability to run FaceTime thanks to (what looks to be) a new front-facing camera, and functionality that uses Apple IDs rather than phone numbers to communicate.

Skype also has worries about Android, especially since network operators could effectively control whether its service was offered or not.

Then there's competition from companies such as Vonage, which now provides free voice over IP chat from your iPhone or Android mobile to Facebook friends all over the world.

"Application store owners have ultimate control over the products and services made available through their channels and may choose to remove Skype from their stores or restrict functionality based on perceived competitive threat or cannibalisation of their own products," says Skype.

Skype knows mobile services are a vital part of its future but already sees problems ahead in dealing with network operators, who aren't known for their goodwill when it comes to any threat to profit margins.

While video calling has largely been thought of as a distant pipe dream, Apple has certainly devoted some energy towards it, which is manifest in the iPhone 4. With the potential for different companies to develop their own ways of using a front-facing camera, the prospect of communicating face-to-face for free is becoming more of a widespread reality.