8x8 Announces Permanent $99 VideoPhone Price

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8x8 Announces Permanent $99 VideoPhone Price

Too bad in this release 8x8 does not cite how much "demand" there is for the Packet8 videophone, which supposedly is the reason for making the "promotion rate" of $99 to be permanent.. Is it 5, 15, 50, or 500 videophones they have sold at the $99 price resulting in the permanent $99 pricetag? Who knows?

Well, even if this is just a marketing ploy, I will share the news and you can decide for yourself...


VoIP service provider makes $99 equipment price on DV326 consumer VideoPhone permanent

SANTA CLARA, Calif. – April 29, 2005 -- 8x8, Inc. (Nasdaq: EGHT), provider of Packet8 broadband voice over internet protocol (VoIP) and videophone communications services, announced it will retain the $99 Packet8 VideoPhone pricing model originally constructed as a promotional incentive to stimulate consumer demand for its Packet8 video services.

Due to favorable consumer response to what was initially a "while supplies last" offer, 8x8 has ramped up production of the broadband Packet8 DV326 VideoPhone and expects to continue to offer the $99 per phone purchase price and accompanying $19.95 per month, two-year service plan model unveiled earlier this month.

"As we expected, once we minimized the upfront equipment investment associated with owning a videophone, consumer demand increased as subscribers saw a more affordable opportunity to bring one into their homes," said Huw Rees, Vice President of Marketing & Sales at 8x8. "So far, the results have been positive and indicate that spreading the financial commitment over a two year service period is a palatable option for the consumer. We believe that consumers who are buying VoIP services that do not include video are investing in soon-to-be-obsolete technologies and services. Just as we see in the mobile phone market, consumers are beginning to expect video to be part of their communication services portfolio," concluded Mr. Rees.

The pricing model adopted for the VideoPhone service mirrors that which cell phone providers have been employing successfully for some time for advanced endpoint devices. The revenue generated by monthly subscriber fees over a two year period, combined with advantageous pricing resulting from 8x8's embedded technologies and its hardware vendor relationships, constitutes what 8x8 expects to be a formula for success.

"We are particularly pleased with the enthusiasm and results coming from 5LINX, the network marketing organization brought on by our partner TJF," added Mr. Rees. "With thousands of independent representatives presenting the Packet8 VideoPhone to family and friends, we expect a tremendous amount of valuable face-to-face exposure from this channel."

8x8 channel partner TJF Associates brought 5LINX on board as a Packet8 network marketing firm in March 2005. Headquartered in Rochester, New York, 5LINX provides business ownership opportunities to independent representatives throughout the United States. 5LINX uses a cooperative marketing approach to acquire customers for market offerings such as local, long distance, VoIP and wireless phone service, internet service, satellite television and two-way messaging. Since its establishment in 2000, 5LINX has built a network of over 13,000 independent representatives.

"We feel the Packet8 VideoPhone represents the next generation of telecommunications in both the U.S. and overseas," said 5LINX Vice President and Co-founder Jeb Tyler. "Our representatives are thrilled to have the opportunity to offer this unique, affordable and appealing communications device to their customers."

Available direct to consumers at www.packet8.net, the $99 Packet8 VideoPhone is being sold with a two year service plan, which includes unlimited voice and video calls worldwide to another Packet8 VideoPhone as well as unlimited local and long distance voice-only calls to any phone number in the U.S. or Canada. The $19.95 per month, 24-month service plan carries an early termination fee of $299. All existing Packet8 VideoPhone service subscribers will also see a decrease in their base monthly service fees to $19.95 per month beginning with their May 1 billing statement.

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