Does MagicJack have a femtocell about to launch? Really? In a comment on Telephony Online by founder Dan Borislow, it appears they are "putting the finishing touches" on a femtocell product. It's not the first mention of the product either, last May they said they were working on such a thing. I have, of course, been skeptical of the company's claims in the past, but I cannot deny that they continue to shake things up in the VoIP world. But a MagicJack femtocell would make that pale in comparison, because until now the company has spent its time repackaging old technology in a masterful marketing shell.
The only femtocells in the US marketplace are by wireless carriers: Sprint and Verizon Wireless so far, and AT&T should follow soon. But these are mainly for improving in-house reception, not about saving money on phone calls - actually they're pretty pricey. MagicJack is not a wireless company. What precisely do they expect to do with a femtocell? Are they going to sell handsets? Become an MVNO (outside the femtocell's range)?
The reasons behind some of MagicJack's success are apparent now. The company is clearly selling far more devices than are getting used, or at least after the first month or two. And that dropoff rate allows them to pocket the rest and subsidize those who do use the service a lot. That's why they focus on units sold rather than minutes of usage in their marketing. I am amused though when I hear complaints about weak customer service - anyone who pays $19.95/year for phone service ($1.67 per month) and expects the best customer service on the planet too is just a tad deranged.
But how a femtocell fits into this world is something I cannot yet fathom. I look forward to the release of this product, if only because it will shake things up. After all, I can be as skeptical as I want, but during a recession we can take all the good news we can get.
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