A few of us had a conversation sparked by remakes of a telecom CEO who said that consumer Internet telephony would be the "killer app" for broadband.
Few people have any problem with the idea that Internet telephony will become dominant at some point, but one has to worry about what form (actually forms) it will take and what the shape of the adoption curves will look like.
At this point we have about a quarter of a percent of households in the US using a Vonage class solution. Most of them are paying about $25 a month (the unlimited spread that goes for $35 isn't as popular) and almost all of them have backup cellphones. Other types of voice over the Internet that don't appear as telephone-ish are more difficult to measure, but some research shows them at around one percent of households. Of the dozen or so Vonage class users I know, only one has severed his other telephony services.
South Korea'a broadband penetration - about 70% of households - is close to saturation. Internet telephony usage in South Korea is about the same as it is elsewhere in the world -- it clearly isn't a "killer app" for broadband there. One can add that the quality of infrastructure isn't the issue. Most Japanese and South Koreans would sneer at what is called broadband in the US.
Andrew has thought deeply on the subject over the past decade and I mostly agree with him. It will take a few years for this to occupy even a modest percent of the pie. I will be surprised if there are more than 5 million "Vonage class" users in the US at the end of 2005 - the economics aren't there for most people and there are other issues standing in the way.
Consumer voice over the Internet in other applications (Skype for example) is seeing much steeper growth. It seems clear where the innovation will come from. It also seems likely that a mini-bubble may stand between us and the end state.
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an aside
A bluetooth phone coupled with iChat AV gives a quality version of telephony. Bluetooth headsets are getting smaller and, hopefully better. It would be interesting if Apple introduced something that linked to a Mac via bluetooth and had a small buddy list display/selector. It is only a matter of time, but Apple would probably get it right.
news and the daily show
Why is it that the Daily Show often nails the news? Sometimes comedy is powerful editorial comment.
Lisa has the show with Clarke's 9/11 Hearing comments on her page.
recommended if you haven't seen it...
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