We recently covered VoIP & Telecom Companies concluding, traditional telecom companies, so long as they are able to come with new service offerings would gain substantial marketshare in this emerging area. Newsweek has come out with an excellent overview of the emergence of the internet telephone and assesses its impact on consumers and service providers. Excerpts with edits and comments added:
Internet telephony—digitally transmitted phone calls—could be the next big thing. Internet calling is a classic disruptive technology—a simple idea that fundamentally changes the premise of an entire industry. The notion of a dedicated telephone circuit for each voice call has been the telephone industry's chief paradigm. Internet voice technology is the biggest threat to their businesses in a century.
Internet voice technology could bring about the much-heralded—and long-awaited—convergence of digital media. With telephone companies adopting Internet protocols, the union of phones with televisions, computers and any other digital doohickey will become easier. The race among firms like Samsung, Sony and Apple to invent the next top-selling gadget could soon get chaotic. Analysts are already speculating about the bizarre merger-and-acquisition possibilities—imagine Microsoft, Sony or Nokia buying a telephone company.In hindsight, cell phones now don't seem all that revolutionary after all, at least compared with VoIP. Like old-fashioned telephones, mobiles are a "walled garden" business, in which the telephone companies use their own networks and retain control over all aspects of the voice data. Personalized features that would allow you to choose one answering message for your personal relationships and another for your boss will become standard. But beyond this is an even more exciting world of convergence: for teens, always-connected mobiles;families could hold Sunday teleconferences via televisions that double as phones. Singles bars might have matchmaking computer data-bases that automatically place a call to a potential sweetheart. Phone calls could be made from just about any device —an iPod, a laptop or a refrigerator.
And who will be the big winners? Internet voice technology is about to crack open the entire industry. In the United States, the big cable companies may take the majority of the pie because they have the fastest data pipes, the most broadband connections to the home and fewer regulatory issues than the telephone companies. The big phone and cable companies are not likely to go out of business any time soon, which gives them an edge with corporate customers. Since cheap phone calls will likely become a hook for selling digital content and services, cable and media companies already in those businesses will probably have a leg up. Firms that have a deep understanding of the digital lifestyle, like Microsoft or Apple, or consumer behavior, like Wal-Mart, could hold the trump cards. The age of the telephone, as we know it, is over. Jeff Pulver here provides information about the trends in downloading intenet telephony software -pulver communicator - Notice the consistent upward trend in the downloads. PCMagazine provides a review of major VoIP offerings in the US market and notes,"For Voice over IP, 2004 was a trailblazing year, as consumers got a first peek at home broadband's next big thing. Promising lower phone bills and enhanced phone features, the technology caught on quickly, garnering close to 1 million paid subscribers in the U.S. by 2004 year end.
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