Review: V-Phone simplifies Net calling
By BRUCE MEYERSON, AP Business Writer

http://news.yahoo.com/s/ap/20060628/ap_on_hi_te/tech_test_vonage_v_phone_3

NEW YORK - It's a top feature of Internet phone service that few bother 
with: the ability to use it anywhere, making and taking calls from the 
same number at the same low price, even if you're halfway around the world.

The buzz kill to this dreamy capability is that you usually need either 
to haul along an adapter to hook up a regular phone to the Internet or 
install software on any computer you want to call from, a requirement 
that usually limits you to your own laptop.

Removing that hurdle is the premise behind the V-Phone, Vonage Holdings 
Corp.'s key-chain device that plugs into any USB port on any 
Windows-based computer to provide instant Internet calling to and from 
your number.

The $40 stick — really just a USB drive pre-loaded with Vonage software 
and your account ID — couldn't be much easier to use. Upon inserting the 
V-Phone into the USB port, the software boots automatically in most 
cases, displaying an a small orange window with number pad. Depending on 
the computer, it took anywhere from 30 seconds to 90 seconds to complete 
this instant setup, which includes online authentication between the 
device and Vonage's servers.

If the dialing window failed to appear, usually all that was needed was 
a click on the orange "V" icon in the system tray or a quick trip to "My 
Computer" to click the drive with the V-Phone. Only in one instance, on 
my office computer, the application encountered a conflict with the 
Windows operating system that required a slightly unnerving fix that 
involved renaming drives.

Since nothing is loaded on the computer's hard drive during setup, 
there's no need to gum up a friend's machine with extra software — 
making it less likely you'll get that look of dismay when you're messing 
with someone else's very personal computer. Just disconnect the device, 
and all the icons and any other trace of your doings vanish.

The device comes with its own jack for standard cell-phone earphones, a 
set of which Vonage includes in the package. This jack is a big plus, as 
it means you don't need to find the separate sound and audio ports on a 
computer, and in the case of a desktop machine, you needn't unplug the 
speakers to plug in your earphones.

One word of caution about the Vonage headset. Curiously, the sound 
quality on several calls seemed much clearer on my end than for the 
person speaking with me. The problem eased some when I held the dangling 
microphone closer to my mouth.

That said, the sound was certainly on par with many wireless calls, and 
when indoors, I often found myself using the V-Phone, my laptop and a 
Wi-Fi connection instead of my cell.

The price tag doesn't include a $10 activation fee and $10 for shipping. 
The V-Phone is available online now through Vonage. Starting in 
September, it will be sold by several major retailers with a $40 rebate.

Calling plans are priced the same as for a traditional Vonage account: 
$15 a month for 500 minutes, $25 for unlimited residential service and 
$35 for business use.

Importantly, this product is being positioned as a mobile tool, 
particularly for the business users Vonage has struggled to attract. 
It's not being marketed as a replacement for the standard home-based 
Vonage adapter that connects a phone with the broadband line and rarely 
gets unplugged.

Each V-Phone is programmed with a specific number and calling plan, and 
the company hopes and expects to generate new revenue as current 
customers sign up for an additional V-Phone account rather than transfer 
an existing Vonage number to the device.

The company isn't offering an option where you can have both an adapter 
and a V-Phone programmed with the same phone number. So if you do choose 
to port an existing Vonage number to a V-Phone, you'd essentially be 
turning off your home phone every time you venture out with the gadget 
in tow.

With rivals big and small cutting prices and even giving away Web phone 
service, an industry pioneer like Vonage needs to innovate to survive, 
let alone remain the market leader. Certainly, as evidenced by the steep 
decline in Vonage's stock after its recent initial public stock 
offering, many doubt the company's future.

This new product is in fact novel. It made mobile Internet-based calling 
enough of a snap that it could easily change user behavior, possibly 
driving more usage or stealing minutes from cell phones. With the 
automated setup and single-prong jack, it takes a simplifying leap past 
existing devices, including some USB drives that run eBay Inc.'s popular 
Skype service or the VoiceStick from i2Telecom International Inc.

The problem is that it appears to be such a technological no-brainer — 
and thus not an easily patentable no-brainer — it's hard to imagine that 
rival offerings won't arrive soon.


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