U.S Robotics forays into VoIP

U.S. Robotics, announced today that it will enter the \$493 million Voice over Internet Protocol (VoIP) equipment market during the fourth quarter of 2005. Initial roll out of the first products is scheduled for October.

U.S. Robotics has always been a favorite company of mine. After my initiial 300 Baud Hayes modem, most of my dial-up modems were the U.S. Robotics brand. U.S. Robotics was launched in 1976 by three University of Chicago students in their garage. It was named after the fictional "greatest company in the known galaxy" in Isaac Asimov's science fiction novel "I, Robot.".

The company has had several ups and downs including acquiring personal digital assistant maker Palm Inc. in 1995, and then purchased in 1997 by 3Com for \$6 billion. They were then spun off in 2000. Finally, U.S Robotics was recently purchased (August 2005) by Platinum Equity. U.S. Robotics became the leading seller of dial-up modems, but it has struggled in recent years as demand grows for high-speed cable modems, DSL modems, and wireless broadband routers have eaten away at the dial-up modem market. Thus, U.S. Robotics decision to diversify and foray into VoIP is a smart move.

"VoIP is the next logical step for USRobotics," says CEO Joseph Hartnett. "Our customers are interested in a full slate of products to support their wireless and Internet-dependent lifestyles. Our VoIP line of products will allow them to optimize their investment in broadband internet connectivity, by bringing new technology into homes and businesses, designed to make Voice communications as simple and comfortable as traditional telephone calling."

The first VoIP product available from USRobotics will be a USB Internet phone. Designed to work with Skype and other instant message services with voice capabilities, the USB Internet phone will allow users to make free calls around the world using their PC and broadband Internet connection. Features like echo cancellation and noise reduction assure traditional telephone call quality and an LCD screen that supports Caller ID provides functionality customers are accustomed to with their cell or landline based communications. The initial U.S. Robotics VoIP product is merely a USB phone which is a bit boring and underwhelming if you ask me, but they are working on more advanced VoIP products and they certainly have the technical know-how to build hardware equipment. In fact, additional VoIP products in development include a VoIP telephone adapter, a USB speaker phone, and a 4-port wireless router with two VoIP phone ports.

"Revenue from North American voice over IP services was more than \$1 billion in 2004, and that doesn't include the free service providers. With continual growth of this market as we move out of the early adopter phase," says Hartnett. "It is only logical that as a company, we would offer these products to our customers."