Here's an idea that came from consultant Kaan Yigit: he believes Internet telephony service providers are making a strategic error by using low long-distance prices to go after new customers. This is a mistake, he said, because most of this audience spends little money as it is right now on LD because most LD calls are within North America.
The real audience for low-cost LD using Internet telephony service is ethnic consumers, who make calls to Asia, South America and Africa. Traditionally, these consumers have paid through the nose for LD but with VOIP, they can slash their prices in a big way. Yigit suggests this also explains why ethnic households are enthusiastic users of high-speed Internet access, which can be used to send e-mail and instant messages to friends and family overseas.
So what does this mean as far as marketing Internet telephony to non-ethic consumers? Instead of focusing on cheap LD, the major service providers such as Vonage, Primus and AT&T should talk about the cool features that Internet telephony offers such as the ability to easily do things such as call-forwarding and conferencing calls, as well as accessing v-mail via e-mail. This is what will generate excitement about VOIP as opposed to low prices.
At the end of the day, VOIP has to be something more than cheap telephony if it wants to become a real and viable business. Call me an optimist but maybe there's hope telephony can avoid becoming no-revenue industry. If you look at Skype, for example, it offers no-cost calling but charges for value-added features. Maybe this is a sign that consumers are actually willing to pay for specific services.

Had a lengthy conversation today with VOIP Inc. CEO Steven Ivester, who believes the price of Internet telephony service will continue to slide to the point where "VOIP will be free". At first blush, this view does not appear to bode well for a company in which one of its four divisions sells Internet telephony service to residential and small businesses. Ivester, however, believes the real money will be in telephony features, and VOIP Inc. will be well-positioned as a hardware maker and wholesale service provider. Within the scheme of things, VOIP Inc. is a tiny player whose business prospects are far from certain. In the past year, it has jumped on the VOIP bandwagon through a series of deals that give a grab-bag of services and products. The unknown is whether anything in its portfolio is worth buying,
and whether it's good enough to survive competition.
Still, VOIP Inc. has one interesting thing going for it: it is publicly-traded, which makes it one of the few ways for investors to gain exposure to the Internet telephony market. Some of the other publicly-traded plays are VoiceGlow and 8x8 Inc., while everyone is waiting for Vonage to do an IPO. The contrast between the scarcity of VOIP investment players and all the hype surrounding VOIP is puzzling. Perhaps, investors and investment banks believe the big guys - Cisco, Alcatel, ILECs, cablecos, etc. - are going to dominate the market so backing small players makes no sense.

Not sure if Research in Motion is too pleased with a column I wrote in today's National Post about some confusion I have over their licensing and messaging strategies. During interviews with co-CEOs Jim Balsillie and Mike Lazaridis, I attempted to get them to explain the economics of RIM's software licensing program where the company will let other device makers such as Nokia and Motorola use its popular e-mail software. The idea is you get a smaller piece of a much larger pie rather than a large piece of a small pie. Lazaridis dismissed this suggestion as "naive analysis", which made little sense to me given Microsoft has made billions of dollars from using this approach with Windows.
RIM also took some offense with the notion it's an e-mail device and software maker. Instead, it's a "wireless platform developer", which means the Blackberry or Blackberry-enabled device can be used to access other applications. While this approach makes sense from a long-term perspective, I was confused by RIM's uneasiness about fully embracing e-mail as its golden goose.
My take is that Balsillie and Lazaridis, who have been discovered by international media in the past year, have adopted Andy Grove's "only the paranoid survive" mantra. My take is they're reluctant to be seen as a one-trick pony in the fear that another wireless e-mail solution could come out of nowhere to steal their thunder. By protraying themselves as a wireless platform developer, they are trying to give the impression the threat of an e-mail competitor is already being addressed.