Peter Griffin: Philips handset brings internet telephony into mainstream

Pack a couple of dozen technology journalists into a room where some new gadgets are being launched and usually you can't breathe for the cynicism hanging in the air.

The gadget launch I attended this week was different.

It may have helped that the room was in a stunning, $6 million home perched directly opposite the Sydney Opera House or that the snacks being served were really good.

But much of it had to do with the fact that the gadgets presented weren't overpriced, over-complicated and of dubious benefit to consumers.

The VoIP (voice over internet protocol) phones unveiled by Dutch electronics maker Philips offer the prospect of actually saving you money, allowing you to communicate with far-flung friends and colleagues more often and in much more satisfying ways.

VoIP phones are nothing new and people are already using Skype, Windows Live Messenger, Yahoo and Google Talk to make free internet voice calls on cordless handsets.

But Philips' debut shows that electronic companies believe the time has come for internet telephony to go mainstream.

A cordless handset, half a million of which are sold in New Zealand each year, can now be used as the primary device for making internet calls.

One of the Philips VoIP phones is tailored to work specifically with the Windows Live Messenger service - the recent upgrade to MSN Messenger. The other is designed for users of rival Skype, which is the most popular free VoIP service.

The Philips-Microsoft handset is angular and modern, all sharp lines and black finishing.

The Skype phone is essentially its plain cousin, more similar in style to the type of DECT cordless phones already on the market.

Both phones let you do the same thing - make internet calls for free without you having to be perched in front of your PC wearing a silly-looking headset.

Both phones also work with your regular phone line so you can receive and make conventional calls and internet calls on the same handset - a huge advantage in taking VoIP mainstream.

Skype has the edge in terms of pricing ($159 compared with $199 for the Microsoft phone) and has more features.

You can, for instance, buy credit to make Skype calls to regular phone numbers in €10 lots. Calling regular phones nationally or in Australia, China, Britain the US and many other countries will cost 3.4c per minute, around $2 for an hour-long conversation.

The Windows Live Messenger phone will have the ability to call and receive calls from regular phones "within six months", according to Ingram Micro, distributor of the phone to retailers throughout Australia and New Zealand. But either service is only as good as the size of your MSN or Skype contact list.

The audio quality is good and the phones are easy to use.

Interestingly, Philips tells me that Telecom is very impressed with the Windows Live Messenger phone and may come on board as a partner in some shape or form.

That could involve Telecom bundling the phone with its broadband packages. Telecom has a joint venture with Microsoft through its XtraMSN website so would logically back the Windows Live version rather than the cheaper Skype phone.

But consider the irony of an incumbent telecoms operator endorsing a product that serves to whittle away the local and toll calling revenues its business is based on.

Telecom boss Theresa Gattung has expressed admiration for Skype in the past, but the prospects of a consumer electronics giant like Philips bringing the technology mainstream should strike fear into her.

But a pragmatic telecoms chief would be able to see how VoIP phones will drive the uptake of broadband, which will eventually outstrip calling revenue.

Telecom claims it will have its own residential VoIP phone service in the market next year.

Just how enthusiastically Telecom takes to the VoIP world will be a good sign of how willing on a larger scale the company is to change its monopolistic ways.