Wed, January 04, 2006 — CIO — Consumer electronics makers and VOIP (voice over Internet Protocol) providers are teaming up at this week’s Consumer Electronics Show, eyeing a growing opportunity to capture the voice business in homes and small businesses.

On Tuesday, North American VOIP carrier Vonage Holdings Corp. and eBay Inc.’s Skype Internet calling software unit each announced new devices or development plans with electronics vendors. The manufacturers know a good thing when they see it: Both Vonage’s subscription service and Skype’s free peer-to-peer software are steadily moving toward the mainstream of telephony, according to IDC analyst William Stofega.

Vonage has more than 1 million active lines using its service, which is offered to homes and businesses in the U.S., Canada and the U.K. Skype, which is widely used by consumers and informally by employees in some companies, is aiming for greater legitimacy, Stofega said.

"The consumer market is very interesting, but where the real money is, in many cases, is small and medium businesses and the enterprise, and that’s a market they haven’t quite tapped yet," he said, referring to Skype. Quality of service and reliability are hurdles VOIP has to overcome for adoption in larger businesses and enterprises, he said.

Two products for Skype that Ipevo Inc. announced Tuesday and plans to ship in the first quarter could help make inroads. The Fly.1 is a cordless handset with a base unit that connects to a PC via USB (Universal Serial Bus). The Xing is a speakerphone that also connects to a Skype-equipped PC via USB. The Xing is a cross-shaped device that sits on a table and has four speakers for use by multiple participants.

Ipevo, a San Jose, California, division of Taiwanese Internet portal operator PChome Online Inc., already sells a wired USB handset for Skype, the Free-1. As a software client, Skype normally is used through a headset plugged into a PC. Skype users would rather not be tethered to a PC, so the cordless option should help drive Skype adoption, Stofega said. Skype also has scheduled a press conference Wednesday with home and small-business networking vendor Netgear Inc., which is likely to bring a similar type of device announcement, Stofega said.

With Vonage, there are already several cordless handsets available and users can simply plug the phone they’re used to into an ATA (analog telephone adapter), which in turn connects to a home or office broadband connection. But at CES, Vonage is teaming up with two manufac