January 04, 2006, 10:19 AM — Consumer electronics makers and VOIP (voice over Internet Protocol) providers are teaming up at this week's Consumer Electronics Show, eyeing a growing opportunity to capture the voice business in homes and small businesses.
On Tuesday, North American VOIP carrier Vonage Holdings Corp. and eBay Inc.'s Skype Internet calling software unit each announced new devices or development plans with electronics vendors. The manufacturers know a good thing when they see it: Both Vonage's subscription service and Skype's free peer-to-peer software are steadily moving toward the mainstream of telephony, according to IDC analyst William Stofega.
Vonage has more than 1 million active lines using its service, which is offered to homes and businesses in the U.S., Canada and the U.K. Skype, which is widely used by consumers and informally by employees in some companies, is aiming for greater legitimacy, Stofega said.
"The consumer market is very interesting, but where the real money is, in many cases, is small and medium businesses and the enterprise, and that's a market they haven't quite tapped yet," he said, referring to Skype. Quality of service and reliability are hurdles VOIP has to overcome for adoption in larger businesses and enterprises, he said.
Two products for Skype that Ipevo Inc. announced Tuesday and plans to ship in the first quarter could help make inroads. The Fly.1 is a cordless handset with a base unit that connects to a PC via USB (Universal Serial Bus). The Xing is a speakerphone that also connects to a Skype-equipped PC via USB. The Xing is a cross-shaped device that sits on a table and has four speakers for use by multiple participants.
Ipevo, a San Jose, California, division of Taiwanese Internet portal operator PChome Online Inc., already sells a wired USB handset for Skype, the Free-1. As a software client, Skype normally is used through a headset plugged into a PC. Skype users would rather not be tethered to a PC, so the cordless option should help drive Skype adoption, Stofega said. Skype also has scheduled a press conference Wednesday with home and small-business networking vendor Netgear Inc., which is likely to bring a similar type of device announcement, Stofega said.
With Vonage, there are already several cordless handsets available and users can simply plug the phone they're used to into an ATA (analog telephone adapter), which in turn connects to a home or office broadband connection. But at CES, Vonage is teaming up with two manufacturers for products that combine several functions. The carrier's Vonage Marketing division and Panasonic Consumer Electronics Co. have jointly developed a cordless phone system with a broadband router included in the base station. That unit can be plugged directly into the user's broadband connection through a DSL (digital subscriber line) router or cable modem, said Vonage spokesman Mitchell Slepian. This eliminates the need for an ATA and can help to simplify setup, he said. The phone, configured with Vonage service, will be available in retail stores in the U.S. and Canada later this year, Slepian said.
Also Tuesday, Vonage announced the commercial availability of a two-line cordless phone from Uniden America Corp., the fruit of a partnership Vonage and the Fort Worth, Texas, company announced earlier this year. The phone comes with a base station with an integrated router and a fixed-line phone, as well as one cordless handset. The UIP1869V is available at retail now in the U.S., with a list price of US$189.99 and a $50 mail-in rebate available after six months of service. In the future, the phone will also be sold in Canada.
Both the Panasonic and Uniden systems use 5.8GHz unlicensed radio spectrum, but they are not Wi-Fi wireless LAN devices, Slepian said.
Also Tuesday, Vonage and D-Link Corp. announced that they will develop an ATA that can support two phone lines. The companies' D-Link VTA will be small and portable and will ship later this year, Slepian said. Pricing was not yet available. There are also Vonage devices available today from VTech Holdings Ltd., Motorola Inc., UTStarcom Inc. and Cisco Systems Inc.'s Linksys unit.
As younger people who grew up with PC-based voice calls start to dominate the consumer and business markets, there may eventually be no need for handsets, according to Stofega. However, today they are a key to broad adoption of VOIP, he said.
"That familiar feeling you have with a handset is something that will take a while to go away," Stofega said.
