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Rise of the soft-phone?

Someone has finally noticed [via SmartMobs] that any PocketPC or Palm OS 5 PDA has the power to become a VOIP phone. But have they noticed yet what the consequences are? I think they have, and they're just keeping quiet about it because they're hoping that their competitors won't figure it out first and out-manouvre them.

But let's play this out. Let's say I go into my local coffee shop with free WiFi, whip out my PDA, fire up the softphone, and start talking. I'm not paying anybody for anything, except my coffee refills.

So something's gotta give:

  • The activity will drive up traffic on the coffee shop's connection. They pay more; maybe they need to switch to a paid service. This induces a competetive spiral with other coffee shops that leaves Starbucks standing.
  • Carriers will raise rates on their bandwidth. Yes, it's a plentiful commodity right now, but if everyone uses VOIP instead of wireless, then we have plenty of broadband traffic all of a sudden and bandwidth isn't plentiful anymore. Price goes up.
  • Softphone networks like Skype add such a load to the net that something has to be done to curb them, or to recoup losses. New fees arise.
  • Mobile phone vendors switch to softphones to preserve market share, and we finally see that shift to high-speed wireless we've been promised.
  • Municipal WiFi networks currently in development gain a whole new significance.
All of this is terribly destabilizing. The softphone, while itself a minor innovation, will drive structural changes across the entire infrastructure that are far out of proportion to its direct impact.

Ultimately I'm thinking we see a flattening of offerings; everything being done via IP (or its equivalent). Phones only actually use "phone" technology in areas where it's not cost-effective to switch over. Phones become a flexible concept in this scenario, so something would have to be done about that. (The beauty of the phone as a communciations medium is the individualized, static "Phone Number": You want someone, you call their Phone Number. Elegant. Simple. Took generations to evolve to its current form and market dominance, and is likely to be the driving metaphor for whatever replaces it.)

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