Ooma starts selling a land-line phone with unique features
Landline phones haven't changed much in decades. But Palo Alto-based ooma has created what it calls a true next-generation voice-over-Internet protocol phone. It has applied some clever technology to deliver a lot …
Context & Ripple Effects
VoIP has spent the past two years splitting into camps: carriers and startups that resell calling as a monthly service, and critics who say the siloed approach wastes the open internet. Om Malik made the latter case in his January 2006 argument against VoIP silos, and the Washington Post profiled hybrid handsets bridging landline and internet calls in mid-2006, while EQO Mobile brought the same logic to cellphones this past May.
Ooma's answer is to sell the network instead of renting it out: a $399 Palo Alto-built box positioned as a next-generation VoIP phone that eliminates per-call charges after purchase. The Associated Press picking up the same-day story under a 'free phone calls' headline signals the pitch is landing beyond gadget press — the fight is over whether home voice becomes a subscription or a device you own.
First-order effects
- Households considering paid VoIP subscriptions now face a $399 lump-sum alternative from Ooma that promises free domestic calling once the box is bought.
- Subscription-based VoIP providers are suddenly competing against a zero-marginal-price rival whose revenue comes at point of sale rather than month by month.
Second-order effects
- The hardware-upfront versus monthly-fee split forces every home-phone entrant to pick a side on business model, since Ooma's price sets the ceiling for what subscribers will tolerate paying recurring fees to avoid.
- If free-calling boxes spread, broadband providers lose one of the last reasons customers keep traditional phone lines alongside their internet service.
Third-order effects
- The landline is being repositioned as an internet appliance — a dumb endpoint whose value lives in software and peer-to-peer routing owned by the buyer, not minutes metered by a carrier.
- A pattern where startups monetize connectivity through devices rather than service contracts would push regulators and incumbent carriers toward defending usage-based voice economics they no longer control.
The trend: Home telephony is shifting from carrier-metered subscriptions to consumer-owned hardware riding flat-rate broadband, with each new box eroding the per-minute business model.