A skeptical Alec writes about an effort to build a home phone that John Sculley of OpenPeak positioned it as the iPhone for the home phoneline. He thinks such high-end phones have not fared well historically. Past experience suggests to him that such phones will be expensive enough to be “out of reach for the average consumer”. Furthermore he says that landline is a dying beast, so there will not be much demand for such phones. I feel that he is a bit quick in dismissing such attempts, even though I have my own reservations about this particular attempt.
First of all according to the PC Magazine story Alec references, the initial carrier partner for this phone could be Verizon. Indeed OpenPeak introduced this phone last year in the same CES. That time they revealed that Verizon will market this device as Fios Fone. Even though Verizon has a web page for this product in their website, I do not see any further development. So Alec may be right that this particular attempt will not go any further.
The phone is very unimaginative in many respects. To begin with the cordless technology that uses 1.9 MHz radio. Instead it should use DECT that can support wideband codecs (it is a VoIP phone as well and not just TDM as Alec seems to suggest). (Update: It is a DECT 6.0 phone, but it is not clear whether it supports a wideband codec.) Next it should support multi-handsets with the base station acts like a rudimentary PBX, which DECT facilitates. This way, each member of the family can have a designated handset and can target ring the handsets. The handsets should have a much bigger screen so as to provide enhanced user experience, like directory based dialing, ease of call control. There is no need to have any browsing and related functionalities at the base station. I have never used the base station at my home. When did you use yours last?
OpenPeak’s phone has a critical flaw. It acts like a service provider’s node, instead of the consumer’s device. A better approach is to market it as a consumer device, treat it as the “central office” and derive features from there without any further dependence on the service provider. This way there is no opportunity to levy any additional monthly fee.
I feel that Alec’s experience notwithstanding, I think such a phone can be built at competitive price. Currently, Costco retails DECT multi-set cordless phones for about $20 per piece (base station is $20, each handset is $20). I would hazard a guess that touch screen will add about $10 to the handset and Ethernet interface and ATA function will add $15 to the base station. But think about it: such a device will really add intelligence to the End and revolutionize both PSTN and VoIP marketplace.
Posted by aswath at January 9, 2008 11:53 AM
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 PMDavid:
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 PMThere 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