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For the last few weeks I've been testing the UTStarcom F1000 Wi-Fi handset that Vonage has started to market in the U.S. I don't do too many product reviews, so I was quite pleased that I'd gel the opportunity. That same week I read in Walter Mossberg's Wall Street Journal column that Panasonic had lent him a 50-inch plasma TV to evaluate: I guess it pays to write for the Journal.
Along with the phone, Vonage set me up with a free account for 30 days so I could try out the whole product. Given all the difficulties I had with the phone (more on that in a moment), I didn't get to make too many calls, but those that I did make went through fine, and the sound quality and delay characteristics were indistinguishable from traditional wircline calls. So the Vonage service worked fine virtually every time I tried it. Getting to that service with the UTStarcom phone was a different matter.
The big question is, will this thing sell? The answer to that will depend on whether we're talking about business or residential buyers. Clearly, the product is targeted toward consumers, though the differences between consumer and small business requirements are few. Large business buyers will probably be looking for something more substantial, but at a suggested retail price of $129.99 (a $40 rebate offer brings that down to $89.99), less than a third the price of a SpectraLink or Cisco WLAN phone, it might well be worth a look.
How Does Vonage Work?
More than anyone else. Vonage has put the idea of IP-based long distance telephone service in the mind of the consumer. According to Brooke Schulz, Vonage's senior VP of corporate communications, Vonage currently has 2 million customers, an increase of 100 percent over the past 12 months. In May 2006 Vonage launched an IPO that raised $500 million. Since then the shares have fallen 60 percent amid concerns about increasing competition from cable companies, free services like Skype, and Vonage's expensive (though very entertaining) advertising campaign.
Before we look at the Wi-Fi clement, we should start with the basic Vonage service arrangement. The essential idea is to use your broadband Internet connection (DSL. cable modem or even WiMAX) and...