Switched On: Cap'n magicJack's port of call

Ross Rubin
R. Rubin|10.16.07

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Ross Rubin
October 16, 2007 10:24 AM
Switched On: Cap'n magicJack's port of call

Each week Ross Rubin contributes Switched On, a column about technology, multimedia, and digital entertainment:

Inventions and incentives have fueled the those using voice over IP to battle the imposing inertia of landline incumbents, as well as the cellphone's continued cannibalization of long distance. The list of disruptive newcomers is long: cable companies offer adapter boxes for analog phones; a variety of companies have extended Skype via solutions that are both tethered to the PC and that operate over WiFi networks; and recently, Ooma (which will be discussed more in a future column) has made the tempting offer of free domestic long distance for life with the purchase of its $400 Ooma hub, which delivers additional benefits such as web-based voicemail and the functionality of a second line without a second phone number.

Into this crowded field has jumped magicJack, the brainchild of Dan Barislow, who developed the "10-10-xxx" phone numbers that enabled consumers to bypass their long-distance carrier more than a decade before the first Skype icon emitted its ascending loading tone. About the size of a double-wide USB flash drive, magicJack has a standard phone jack on its back that allows you to plug in any standard touch-tone telephone handset from a leading-edge DECT phone to an old princess design.

Upon plugging magicJack into your computer, it installs its softphone software and assigns a phone number. After this, you can make free long distance calls and take advantage of free voicemail whether you have a Manhatan Jack or a Monterrey Jack. The product claims to install in about a minute (but took longer on two test PCs, perhaps due to its beta status) and doesn't take itself too seriously. A status message notifying users that they're receiving an upgrade contains the congratulatory message, "Lucky you." Voice quality was solid with only very small dropouts even over a spotty WiFi connection.

magicJack isn't the first USB stick to provide instant softphone capabilities. Last summer, Vonage introduced the V Phone, which is in many ways more technologically impressive. Rather than just provide a bridge between a PC and an old clunker handset, the svelter V Phone is an all-in-one solution that includes an earbud for making and receiving calls. It even includes a modicum of flash memory for storing phone lists or perhaps some music to play during long waits on hold.

This makes it a far better traveling companion than the magicJack since most landline handsets don't exactly fit inconspicuously into a laptop bag. However, increasingly laptops are being purchased as sleeker, stationary substitutes for desktops. Furthermore, there is the argument that while you're traveling you're far more likely to rely on your cell phone anyway. magicJack contains technology to enhance VoIP quality when used with analog handsets. Next-generation options should include an integrated earbud like the V Phone as well as a retractable USB port that would stand up better to the rigors of life on the road.

The other difference between magicJack and the V Phone, however, has less to do with the hardware and more to do with the services behind them. While both the V Phone and magicJack are priced at $40, the V Phone requires a Vonage subscription that begins at $15 per month for 500 minutes. MagicJack is sold with the promise "Never pay a monthly phone bill again."

That's not to say, though, that magicJack will be free forever. While the company bundles a year of free phone service with the device and enables consumers to buy a second year of service at the introductory pricing of $20 for the year, no one can say what rates may rise to after that point. To keep consumers, magicJack will have to be nimble rather than quick to raise prices. Still, for those who don't mind having their PCs on any time they want to make a phone call, and at $60 for two years of long distance and international calling, it's somewhat less risky than jumping over a candlestick.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group,. His blog can be read at http://www.rossrubin.com/outofthebox. Views expressed in Switched On are his own.
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