Nothing said VoIP more than a large trophy phone on the desk. Over the past 10 years, phones got bigger and grander - standing tall with large back-lit screens. Organizations were adopting VoIP, and that old small phone had to go, in the name of progress. Prices headed north, $500 per phone was common, some models hovered around $1000. But the party ended last year, and 2008 will likely be best year of IP Phone sales.
The VoIP desktop phone evolved tremendously over the past decade. Audio quality got much better with codec improvements, noise canceling microphones, and HD audio. Other device improvements include power efficiency gains, POE, improved screens, and XML browsers. Despite all these breakthroughs, the phone remains nearly functionally identical to its digital ancestors. With the exception of the under-utilized XML browser, most "VoIP" features have nothing to do with the phone - click-to-dial and unified messaging are enabled at the server. What has the VoIP revolution delivered to the desktop phone? Hold, redial, transfer, and speaker. To paraphrase The Who, 'Meet the New Phone, Same as the Old Phone', only bigger and more expensive. Are organizations really going to continue to buy one for each employee? And what will they pay for the models they do purchase?
This is a follow-up from a feature last July--IP Phones Will Never Beat 2008 Record. It claimed that due to a variety of factors, the IP Phone peaked in 2008. Economic conditions were the obvious driver in 2009, but it is more complex than that. Users are not tossing their phones out the window like an SCTV television; phones aren't disappearing, just the profits associated with them. When the profits go, the conversation changes. Conversations with the manufacturers certainly are - they talk about applications instead of phones. The next phase will be more major voice vendors not even offering phones at all--much like Microsoft and Digium today.
Microsoft has been a big sponsor of the kill the phone movement. Microsoft's vision is that a Windows computer can do everything a phone can do only better, and it is winning over converts. But softphones--the PC-based alternative to phones--are not for everyone. Softphones offer many benefits, price and portability being the big ones. But there just isn't any satisfaction in slamming down a headset. And sometimes dialing a phone is easier than mousing around. Another problem is that headsets tend to be personal, and phones tend to get shared. But emotions and convenience don't drive technical strategies or budgets. The softphone usually wins when compared on features and price. Let them eat cake [while wearing a headset].
This year softphones got a major shove into the mainstream with the remodel of the US Counter-Terrorism Unit (CTU) located at Fox Studios. The fictional agency from the hit series 24, always on the techno-fiction edge, went phoneless. Now CTU staff don cordless headsets to save America. And if a desktop phone can't save America, what can it do?
Every major voice system vendor now offers support for SIP phones. SIP is the new analog, but with greater potential. The trade-off in the past was proprietary feature-rich phones versus simple analog phones. Most proprietary phones still offer more features and benefits over SIP, but that gap is closing. SIP phones are emerging as a viable desktop option as vendors enable features through the XML browser. Digium recently released Switchvox 4.5, with phone-top features such as call park and record-a-call. Aastra SIP phones provide rich features on numerous phone systems including conferencing and visual voice mail. Bria, the latest SIP softphone from Counterpath offers HD audio, video, Outlook integration, LDAP integration, presence support, bridged line appearance, and many more features for less than $50.
The point being soft phones and SIP phones represent a major threat to the traditional enterprise proprietary phone. The prices on SIP-based devices are decreasing while functionality improves. It is going to get much harder for the proprietary phone equipment vendors to compete with this proposition. The typical response, a fancier and bigger proprietary phone with no new features, isn't sufficient any more. But the far bigger threat isn't softphones or SIP devices--it's existing phones and mobile devices.
Digital phones today do it all--at least when combined with a VoIP capable infrastructure. The latest and greatest VoIP features are available on IP phones, digital phones, analog phones, and cell phones too. In the consumer space, we see this with Google Voice--it delivers conferencing, unified messaging, recording, and click-to-dial on any phone. The phone is no longer the factor in determining available features, and if any phone will do, then existing phones make a lot of financial sense--especially since older phones have all the current leading phone-top feaures; hold, redial, transfer, and speaker. An emerging architecture, the SuperPBX, directs calls to multiple devices including older phone systems, mobile devices, and home lines using direct dial numbers instead of direct integration. The SuperPBX sits above existing phone solutions and delivers enhanced features separate from call control. Mitel's Dynamic Extension does this, and it monitors the call so users can access advanced features via DTMF from non-Mitel phones.
In addition, nearly every major voice player has some mobile integration story that makes cell phones an extension. Many have cell phone clients to access features and options. A traditional cell phone can take calls through the cellular network, but a mobile smartphone can also become a SIP softphone using WiFi and in some cases 3G. Then comes FMC capabilities such as SEN's Hi-Path Mobility that actively passes a live call from cellular to WiFi/PBX. There are also femtocell technologies that increase cellular coverage within an enterprise, and new femtocell technology is on the horizon that completely bypasses cellular networks. Using the cell phone as a primary enterprise phone is rapidly becoming a viable option.
Mobility appears to be the current killer app, and the star of the show is the mobile smartphone. The smartphone can do it all: calendar, email, SIP, 3G, web, video, basically an app for all seasons. Mobile phones are known to kill, threaten, and replace devices and industries including pagers, gaming devices, highway call boxes, PDAs, and many more--and now the desktop phone is at risk. The voice system manufacturers embraced mobile phones so effectively that the need for the desktop phone now becomes questionable. So far, the primary argument for mobile integration is price--switch the calls to land lines to save per minute costs. But factor in mobility needs, along with decreasing per-minute charges and the cost of hard phones, and the dynamics could shift against the desktop phone.
So what are desk phone makers to do? Change it up! The basic value proposition of the standard desktop phone must evolve. As exciting as hold, transfer, redial, and speaker are--it is going to take more to command a decent price in desktop phones. Touch screens and picture screen savers are nice, but hard to justify. What most phone makers are overlooking is that the desktop phone can be used for more than voice-related applications; it must be viewed simply as an always-on IP device. Modern HVAC systems rely on IP based thermostats--why not in the phone? To compete with multi-purpose devices such as a cell phone, it will be necessary to explore uses beyond voice communication.
One clear trend emerging is desktop video phones such as those available from Cisco, Polycom, and Grandstream. These phones significantly change the end-user value proposition with increased productivity, and still provide the familiarity of a desktop phone. The smartphone demonstrated that an operating system on a phone can be attractive. Android is a viable OS readily available to phone makers. Would a desktop phone that can run 30,000 apps or lend itself well to custom applications make sense for the enterprise? Especially WiFi/DECT phones that (like a smartphone) can integrate a scanner and mobility into business workflows.
So is the desktop phone dead? Not yet--but the future isn't too bright for mid-range IP phones. This part of the market will likely feel a squeeze--from existing phones, cell phones, softphones, and less expensive new SIP phones on one end--and by a new breed of high-end phones on the other. The high-end phones won't be more of the same old bigger phones with improved displays. They must instead offer new features such as visual communications or other applications that improve productivity. It's time to make the IP phone cool again.
Related:
IP Phones Will Never Beat 2008 Record
Reconsidering the IP Phone
Cutting the Cord on Enterprise Phones
Mobile Phones Kill
Dave Michels is a regular contributor and blogs exclusively about telecom at www.pindropsoup.com. He will be part of a panel on the future of the phone at VoiceCon Orlando
