Vonage Launches Skpye Competition

 Red Herring

Call it the ultimate test of convergence. Skype—best known for cheap, PC-based calls—is now available on a slim Wi-Fi handset that goes on sale this month. The sleek new handset being hawked by NetGear will work through ordinary Wi-Fi high-speed wireless connections. Vonage, best known for bringing Internet calls to ordinary handsets, won’t be left behind in the hardware race. The Vonage V-Phone, launched late last month is a $39 gadget that turns any PC or laptop into a Vonage telephone (see “Toys,� p. 21). 

 

The dueling gadgets will be a test of the future of the Internet telephony market. By 2010, Internet calling companies will own roughly a quarter of the local phone business, according to research firm TeleGeography. Handset-based services like Vonage offer cheap calls starting at $14.99 per month. However, rivals like Skype offer the ability to contact a user on whatever computer they happen to be using at the time—charging small fees to connect to traditional phone services (a fee that Skype has waived in the United States) or for features like voicemail.