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July 19, 2005

Ignominious

Om and Aswath pass comment on the latest generation of VoIP telephone adapter, called PhoneGnome.

On the downside, this product can't be saving many potential users much money as they still need a POTS line. The self-provisioning of this device's long-distance supplier details looks like a problem for the mass market; potentially lots of support costs. (Assuming I understand correctly how the product works.) It only improves the calling experience marginally.

That said, I'd give it quite a warm reception, particularly for a V1.0 product. If marketed well it'll find a ready SoHo, small biz and heavy home user market, particularly outside the USA where call costs are often higher, choice is sometimes lower, and international calls more frequent. By focusing on ease-of-adoption rather than featuritis, it certainly stands out from the crowd.

It unclear how much benefit you get if your correspondents don't have a similar box. The number of people using Internet-open SIP-addressable phones is infinitesimal. Given a choice of telling your buddies to speculatively buy a $119 box, or download Skype for free, it's not difficult to see which route most price-conscious technically-savvy users might go. If PhoneGnome was able to tap into Skype users from the outset as its 'free calling' base, the network effect would be stronger. But that would require Skype to allocate all users a number from some ITU-blessed VoIP range, and get sucked further into the interconnect and regulatory tar pit.

There seems to be an obvious 'service' opportunity that is missing -- dynamic carrier pre-select, where every call is sent over a least-cost provider using appropriate prefix codes. (I'm thinking there's a market here in the UK to stand on the street with a laptop and SIM reader, and offer to reprogram people's address books on their mobile SIM cards by prefixing numbers with lower-cost prerouting codes...)

Incidentally, PC-based VoIP is a very different animal partly because you do PC-based things like exchange URLs, share desktops, swap files, and forward emails during the call. If offers a fundamentally different experience and addresses different needs. So it has a totally different market demographic and economic drivers. It isn't totally fair to compare this to Skype, except as a learning experience. PhoneGnome is aimed at a specific market of people whose communications lives may be phone-centric without being PC-centric. So overall, a thumbs up for extending the footprint of VoIP to new markets and users.

Posted by Martin Geddes at 11:47 AM
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