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Is Apple Buying VoIP Provider iCall?

Apple is flush with cash, and as it looks like we're coming out of the recession (fingers crossed!), it's in prime position to make some acquisitions. Last week, Apple purchased music startup Lala, for example, and it was sniffing around mobile ad network AdMob before Google acquired it.

So what will Apple buy next? One reader just sent us a message that Apple is in talks to acquire VoIP company iCall in a $50 million to $60 million deal.

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Is this true? iCall co-founder and CEO Arlo Gilbert, reached by phone, would not confirm or deny any talks, but that's the response he's supposed to give us. We have not yet heard back from Apple. (Anyway, everyone talks to everyone, so it's worth discussing.)

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So, should Apple buy a VoiP company — the way Google, increasingly a rival — has acquired two? (GrandCentral, now Google Voice; and recently Gizmo5.)

For its long-term strategy, it makes sense for Apple to at least have a VoIP product available — even if only for defensive purposes, even if it never launches.

In the short term, it would probably piss off Apple's carrier partners, which sell the majority of Apple's iPhones, and currently make the vast majority of their revenue by selling voice phone service. But for Apple's longer term strategy, it is a good idea.

Why? It's obvious to everyone but wireless carriers that wireless carriers are increasingly becoming dumb pipes. People are sick of carriers' ridiculous fees and policies, and just want a good device that can connect to the Internet and make calls.

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As data networks evolve, it will be possible to make calls as well over the Internet as by using a voice network, and cheaper. (It's already getting there.) And that's when Apple may seek to increase its control over iPhone owners — and recurring revenue from them — by becoming a VoIP service provider. Moreover, as that becomes a bigger industry, Apple should not give that business to Skype, Google, or anyone else.

So for that long-term interest, Apple may already be hiring (or acq-hiring) today.

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iCall has more than 100,000 iPhone users, its CEO tells us, so it already knows the business pretty well. It also owns the trademark to "iCall," which Apple may or may not want to own. And perhaps it has executives and/or technology that Apple could want.

So whether true or not, it would not be too surprising.

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DISCUSSION

I followed iCall for 8 months before its release and have been using it ever since as I have no AT&T service in my apartment (go figure).

When this app was awaiting approval from Apple for 6 months, there was a facebook group where people discussed it. When it was finally approved, the facebook group was flooded with support requests because the product wasn't anywhere close to working as advertised. iCall shut down the group and tried to contain all support requests in forums. Anytime anyone said something bad about iCall on the forums or fb group, the post was deleted and the poster was banned. Now the forums have been shut down and the only way to get support for this perpetually broken software is through the app on the phone. In order to submit a support request, you have to type in your entire problem in about 20 seconds or it kicks you out. If you manage to do that, they're supposed to get back to you within 24 hours. I have submitted several support requests and never once heard back.

Problems I've had include:

-iCall flat out won't call certain numbers. It just says call ended. It seems to be that the more you call a number, the more likely it is to be "blocked"

-switching calls to voip hardly ever works

-you can't receive calls through iCall unless the app is running and your phone is in NOT IN STANDBY

-the person on the other end of a voip call hears your voice as an echo

The lack of support and communication from the iCall team lead me to believe it had given up on the iphone app or that the company was going under. I would be shocked if Apple is actually considering purchasing iCall. It would cost much less than 50mil for Apple itself to build something better than the mess that iCall has assembled.