MagicJack is demonstrating a device near the International Consumer Electronics Show this week that it claims will let consumers make VoIP calls using any GSM phone.
The company already sells a MagicJack
made for use with conventional, analog desk phones. In the new product,
coming in the second quarter of this year, it will replace the phone
jack with a miniature GSM (Global System for Mobile Communications) base station, or femtocell. Any GSM phone from any carrier will be able to connect with the femtocell to make VoIP (voice over Internet Protocol) calls to anyone in the U.S. and Canada, MagicJack founder Dan Borislow said.
Like other VoIP service providers,
MagicJack sends calls over an IP network instead of the standard public
telephone network, so it can sell phone service for less. The company
charges US$40 for the MagicJack and includes one free year of service,
then charges $20 per year for subsequent years. That covers calls to
other MagicJack users as well as to conventional phones. The pricing
will remain the same for the new femtocell.
The current MagicJack is a device about the size of a matchbox with a USB connection and a phone jack. The USB connector
plugs into the user’s computer, loads software onto it, and uses the
computer’s power, processor and broadband connection. The femtocell
will also use the PC, but it will let users make calls with their cell
phones instead of wired phones.
Many carriers are already exploring the use of femtocells to improve
coverage inside subscribers’ homes and ease the strain on their own
networks. A femtocell is designed to work like a cellular base station,
but only within a home, and to carry calls over the subscriber’s own
broadband connection instead of the carrier’s wired backhaul network.
MagicJack’s femtocell lets users bypass mobile operators altogether. It
can be used with any GSM phone on any band, including locked phones and
the Apple iPhone,
Borislow said. He expects most customers to make the calls with old
phones that they haven’t been using. The femtocell’s range is wide
enough to cover a 3,000-square-foot (278-square-meter) home, he said.
Borislow said he didn’t want to disclose how the femtocell can work
with locked phones.
MagicJack, a subsidiary of a private company
called YMax, launched its product two years ago and so far has sold 5
million MagicJack devices, Borislow said. The MagicJack is sold in
retail stores including Best Buy, Walmart and RadioShack. He claims the service operates with 99.9 percent reliability and better call quality than Skype. Ymax, based in Palm Beach, Florida,
had revenue of about $30 million in 2008 and $110 million in 2009 and
is profitable, he said. Borislow said the service is so successful that
the company doesn’t have to charge for calls to phones on the public
Also in the second quarter, the company plans to introduce a softphone
application that will allow consumers to use the service through their
PCs, without a MagicJack device. That service will also cost $20 per
year, Borislow said.
The MagicJack is set to be demonstrated on Thursday night next to the
ShowStoppers product showcase, which is being held on the sidelines of CES in Las Vegas.