Comments: Home iPhone

As you know, Aswath, like you I've been an advocate of this kind of thing for a long time. I even put my money where my mouth was and tried to get things moving in this direction with PhoneGnome. Here's a few secrets I learned along the way:

1. While bloggers and such like to talk about "VoIP is just another app" and "user-owned networks" and such, the reality is mainstream customers actually LIKE to pay monthly fees - perhaps not so much that, but they are so used to having a service provider (with monthly fees) behind telephone service, they really can't understand any other way.

2. Home phone stuff is cheap, basically blow-out prices. While people pay silly sums for cell phones, customers expect to get home phone equipment really cheap (like $29.99 cheap). And their home phone is not broken, so there is nothing to fix.

3. Home phone service is not broken.

4. Capital markets don't want to fund things that don't have recurring revenue - "hardware" generally does not make them "Web 2.0 giddy" (Slingox being an exception to that rule).

5. Did I mention home phone service is not broken?

I'm not saying it's impossible to move past these, but they are big barriers. I think it is going to take a pretty significant bit of capital (far m,ore than anyone in this space has raised to date) to "seed" this model and few people are prepared to be that contrary.

Posted by David beckemeyer at January 17, 2008 06:57 PM

David:

Of course I know of your opinions and your efforts in developing products at the END. But here my point is that existing DECT phone vendors can easily handle features that can bring features to the end that do not require service providers. This can be done even in PSTN domain. The one point I am not able to agree is that home phone is cheap. An unscientific review of the retailers suggest to me that there is market for a phone "system" that costs $100. Not withstanding your considered opinion, I think existing vendors will not require large capital; they can easily add these capabilities to their roadmap without requiring large capital.

Posted by Aswath at January 17, 2008 09:35 PM

There may be a market, Aswath, but I don't think it's a large market. What people are looking for, I think, is a phone, not an information appliance. If people generally wanted information appliances, then the tablets and other devices we've seen come to market over the past few years would have been far more popular than they've been.

Posted by Alec Saunders at January 22, 2008 08:48 PM