CES, Part 2: Voice Over IP Hits The Masses

Consumer VOIP will hit mass adoption later this year

Like David, I too was at the Consumer Electronics show this year. One of the big themes was consumer Voice over IP. A host of previously unannounced products made their way onto the show floor with no fanfare (as well as a few with major hype). Consumer Voice Over IP is finally crossing the ease-of-use line to reach a wider market.

There were three approaches with promise on the show floor: portable handsets, consumer routers, and Skype gateways.

1. Portable Handsets: Almost a cell phone...

The best example of the first approach was UT Starcom's Vonage handset. Vonage is one of the major Voice Over IP providers. Previously, they used Cisco and Linksys VOIP devices that you plug into your network at home. Now innovative telecoms company UT Starcom has produced a wi-fi handset that lets you make calls from anyplace you can connect to 802.11b. Now consumers buying Vonage don't need to set up any equipment in their home so long as they already have Wireless.

On top of that benefit for Vonage customers, it will work anywhere you have wi-fi. Going to a hotel on business? Throw your phone in your luggage and your home phone number travels with you.

It's a flashy prototype and certainly got quite a bit of attention on the CES show floor. Of course the problem is obvious -- you still have to carry the handset and your cell phone since WiFi isn't ubiquitous. And at home, you can't use any of your existing phones without going back and installing the original gateway. It may be an easy piece of new equipment, but it still replaces everything you've got.

2. Consumer Routers: No more landline...

The second approach was to use existing home networking gear to replace the landline phone. Netgear and D-Link both had unannounced products on the show floor: combo 802.11b/g routers with built-in VOIP. Basically, it's a wireless router with two normal phone jacks in the back. Plug your existing cordless phones in there, and you have instant voice calling. Netgear was there with AT&T CallVantage and D-Link was there with Lingo. Both manufacturers promised firmware updates to work with a variety of services, but out of the box the routers work with default providers.

Anybody with a home network can now have VOIP too. Just take that old wireless router and replace it with the same brand except it's got phone jacks. Netgear in particular made a big deal about how the router itself did some magic to make sure voice calls were not interrupted by data usage from the computer. These devices are formally coming out by February or March will retail for about $120.

3. Skype Gateways: Free calling...

The most interesting solutions didn't get much press at CES, probably because they were too esoteric for the masses. However, it's hard to argue with free as a consumer proposition.

A Taiwanese company called Sysgration introduced the SkyGenie product line. These devices sit between your regular phone jack and the phone. An additional plug goes into USB port on your computer. Your phone works as it did before.

However, if you dial "##" before your number, you are now dialing on Skype, the free calling network. Incoming Skype calls ring on your home phone, complete with caller ID and a different ring pattern.

The high-end device, the SkyGenie Voodoo, can even route incoming Skype calls to other phones and receive calls that then get routed over Skype. When at both ends of a call, SkyGenie Voodoo provides free international calls using your current phone system. For less than $100 in equipment, any company with overseas offices can get rid of their huge telecommunications costs.

While it's a little complex for the mass market because it requires Skype signup, free is a powerful motivator. Though it received the least press attention of all the VOIP companies at the CES, I suspect that it (and other similar products like those by ActionTec) will have a greater effect on the telecommunications market in the long run.

Despite the lack of press, these companies certainly received a lot of attention from distributors on the show floor...