Using Gadgets to Sell Service

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Rich Tehrani
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Using Gadgets to Sell Service

For years you have heard me rant about how the future of telecom is in CE or consumer electronics. Specifically I told VoIP providers we need to integrate SMS and other cool services we have in our cell phones so our home phones can be as desirable as our mobile devices.

Here are my exact comments from a post titled VoIP 2.0 in 2004:


The Device Sells The Service

There are at last count over 100 VoIP service providers out there and counting. How will they differentiate themselves? Some will have the best user interface, price, quality of service, etc., but is that enough differentiation for hundreds of competitors that are effectively able to compete with one another globally? Carrier's carriers like Level 3 (how times have changed) and other new entrants to this market are going to be the backbone of the next generation of service provider making it easier than ever to compete in this market. The answer is simple. As VoIP becomes commoditized, many providers will look to Apple and copy the iPod model.

I am not talking about MP3 over IP. I am suggesting the development or rebranding of a device to lure customers into buying a service. When I look at my home wireless phone and compare it to my mobile phone I can't believe they were both sold in the same century. Home phones do basically nothing, while today's mobile phones can record calls, download and play music, boast speakerphone functionality, have built in SMS, IM and e-mail clients, can take and e-mail photos, videos, and voice messages, can operate in a walkie-talkie fashion, can support bluetooth, can be a PDA, can store thousands of contact records, can have memory expansion slots, can store appointments, a to-do list, and more. Surprisingly the prices for typical cordless phones and mobile phones aren't that different.

I believe that teenagers would give up their Xboxes this Christmas if they could buy a killer WiFi VoIP phone that let them talk for an unlimited amount of time, conference, IM, speakerphone, bluetooth, etc. I am just waiting for the brilliant service provider who brings it to market first.

verizon-hub-2[1].jpg


I virtually begged VoIP providers to listen but most did not and perhaps the scariest competitive threat to these companies would be seeing Verizon Wireless taking my advice. And they have. Recently they announced their Hub (release date Feb 1, 2009), a supped-up multimedia home phone with an elegant design and a seperate integrated wireless phone which at the moment does not support DECT. It will retail for $199 after a $50 rebate and a subsequent $35 monthly charge.

With the superiority of the Verizon Wireless network already locking in consumers, a device which extends this service into the home makes the potential for Verizon to add even more stickiness.

The Hub will support SMS messaging; potentially MMS and it should eventually support all cell phones from other carriers. It is being billed as the centerpiece of your communications network.

The two questions I immediately had were whether there will be an API for developers. So far the company tells me this isn't happening. They are however exploring "many options" according to Jeffrey Nelson, Executive Director, Corporate Communications, Verizon Wireless. This includes making the Hub the centerpiece of a smart-home.

So will this new gadget be successful?

I am not sure. It is not the killer mobile gadget I had hoped it would be but a hybrid CE device with tight integration with the mobile device/service. It reminds me a slight bit of the Palm Foleo which was a hobbled laptop idea which interfaces with the smartphone.
 

verizon-hub-3-thumb-590x331-5595[1].jpg

But the difference here is the Hub really could become the centerpiece of the smart home and if it eventually ties in with music and TV, it could become really contagious (in a good way of course :) ). I for one was hoping this device would have a femtocell option and Tom Keating seems to agree.

Obviously this is a challenging financial environment to be launching a brand new device category but I still feel very strongly about the opportunity to tie in VoIP service with a killer home wireless device. I am not sure what this new product will look like but I sense the demand and the Hub is one step closer to this dream gadget.

The only challenge of course is whether the iPhone and other smartphones reduce the need for a "hub-like" device in the home. For now, iPhone penetration is relatively low and the need for a reasonably priced smart home control panel is there. This device could become a Vonage killer in the short run and over time be something which competes with Apple TV.



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