The end of the phone as we know it
Startups and disruptors (yes, Google) seek to rethink voice calling.
Andy Jagoe is zigging while the rest of the mobile world zags. Let everyone else chase the next hot iPhone app. He’s betting the next big thing is a twist on the same old thing: making calls.
He may be right. Jagoe, CEO and co-founder of startup 3jam, is one of several Silicon Valley dreamers who thinks he can reinvent the phone call. And really, let’s admit it’s in need of some Internet-style innovation. We’re in 2009, for crying out loud. Why isn’t call forwarding as easy as e-mail forwarding? Why don’t your voicemails live in a nifty little online inbox?
Remember web 2.0? It’s time for phone 2.0.
And it’s arriving. The most prominent example is Google's (GOOG) Google Voice, an invitation-only service that offers a free Internet telephone number that forwards calls wherever its owner chooses and delivers features like visual voicemail, call screening and transcription.
Mountain View-based Ditech Networks (DITC) has a similar invitation-only offering called toktok. San Francisco-based 3jam, which is open to the public and starts at $5 per month, adds tricks like convenient group text messaging.
Voice apps are coming
Not everyone is a fan. Apple (AAPL) caused a stir last month when it barred Google Voice software from the iPhone App Store, saying it duplicates features the handset already provides. But Jagoe thinks the services will prevail eventually. “It's going to be hard,” he says, “to prevent this kind of functionality from appearing on a phone.”
Indeed, people who use these services swear by them, and in Silicon Valley these days it’s a growing cohort. (At a mobile technology panel this month at Microsoft’s (MSFT) Mountain View campus, Google Voice users outnumbered Amazon (AMZN) Kindle users five to one.) The reason is simple: phone 2.0 is liberating phone calls the same way webmail liberated e-mail a decade ago. Now you can keep your phone number, your call history and your voicemails no matter how many times you move, change jobs or switch carriers.
Over a burger at a San Francisco lunch spot, Jagoe explains why this revolution in phone calls is happening now. First, it recently became more affordable for startups like 3jam to forward calls to landlines. Second, Neustar (NSR), a company that enables text messaging, this year gave Internet-based phone numbers a boost by allowing them to send and receive text messages. And third, mobile consumers increasingly crave better options for managing their conversations and staying productive.
Of course, even if the masses are ready for a phone call revolution, there’s no guarantee they’ll buy it from 3jam. If Google Voice opens up its free service to the general public soon, it will get a lot tougher for Jagoe to sell monthly plans. And then there’s the threat from the phone giants: Glenn Lurie, president of Emerging Devices at AT&T (T), tells Fortune that he’s keeping an eye on Internet-based voice services. Clearly carriers would prefer to be the ones selling those kinds of features.
Regardless, Jagoe has a couple of things going for him. 3jam recently finalized a deal with Peek, maker of the eponymous e-mail device, where 3jam will offer phone numbers to Peek users. With those numbers, users soon will be able to more reliably send texts as well as e-mails, and even get voicemail transcripts.
Perhaps more important, Jagoe is running a lean operation, having recently cut 3jam’s full-time payroll from 25 people to 5. He says the company is on track to be cash flow positive by the end of the year, which should help him to avoid the fate of VoIP peers like Yoomba and Jangl that burned through cash before they could figure out a long-term business model.
In the end, the business part has to work. Even in the phone 2.0 world, if you can’t pay the bills, you get disconnected.
I live in France and pay 29 euros a month for a box that gives me unlimited calls to anywhere in the world, high-speed internet access and about a hundred television channels from around the world. It offers free call transfers and an online voicemail and sms service; I can even check voicemail and sms on my TV. Why can't they provide the same kind of service in the States or in Canada, for the same price?
Is phone 2.0 just dead before it started? Mobile is where I'm looking, my parents are the only people I know with a land line.
I like the concepts of Google Voice, basically because it's Google. I want a Google Carrier though, it could probably do anything I want and make calls everywhere and have really cool pictures for holidays…
I am sorry to see 3Jam go down the same road that was already well traveled by numerous other startups. There's a lot of carnage on the side of that road. The cost structure for VoIP for both calling and texting isn't low enough to form healthy margins for a startup. Skype can pull it off because of their massive volume. Google can pull it off because well, they're willing to subsidize it. And let's be clear…Jangl did have two nice business models in place. That's not really why the company isn't around anymore. I know, I was there.
If telecom companies let outside apps run free calls, how can they operate? These apps eat away at profits which in turn will mean less service. Does Google or any of these other companies control the cell towers and infrastructure needed to use the applications? Why would any of the telcoms let an app on their network that kills profits from the infrastructure they built?
Not only google does all this call forwarding from a single number to all numbers (to a maximum of 6) that you have, but also does take voicemail from callers, you can screen the callers before you actually respond to them, and ….drums please, coupled with gizmo5 you can make free calls all over the US from your computer, yup free. I have been doing that for a month already.
In other words, you can reduce your phone bill by a lot. Disconnect your landline, keep your office phone, have broadband internet access, and the world is yours (google calls outside the us are not free).
This program is very similar to the beta stage application known as VoxOx.
Keep in mind, there is another WAR brewing with the major carriers… services delivered over $$ "MOBILE BROADBAND" $$ or services delivered over (best effort) wifi (aka FREE!!) That is why innovation in the cell phone market stagnates around that issue. Finding ways to communitcate dirt cheap or free will continue to erode cellular carrier's price premium and the companies will fight dirty to stop it at any cost. When google comes to the party.. they don't play around.. how about a wifi device, with a phone plugin card… so that the tail doesn't wag the horse anymore!
Curtis, you're the clueless one if you think Skype and Google Voice are the same animal. They're not even close. Both have important features and basics that the other lacks.
Well in the case of Google…you would just place the call through your landline or cell phone.
The Google voice service is really just an automatic call forwarding service. It takes the call and rebroadcasts it to all your phones based on who is calling or when they are calling. It's extremely cool and useful.
As for VOIP only services such as Vonage, Magic Jack, etc…they all provide E911 services similar to a cell phone….You can still dial 911.
I dropped my land line in 2002 and I am not looking back.
Welcome to 6 years ago! Many VOIP companies starting providing most of these new features you speak of years ago. Oh, also there is this little company called "Skype" that started in 2003 – maybe you have herd of them? I guess new technology doesn't exist to CNN until Google gets their hands on it.
In the phone 2.0 world what happens to the ability of a 911 Emergency Center to respond to an emergency call?
re: "starts at $5 per month, adds tricks like convenient group text messaging.". We use myabui.com it's free.