Wednesday, October 1, 2008

Who is behind Magic Jack?

As part of our investigation into MagicJack, we wanted to know who is really behind it? Magic Jack isn't that unique - they have a number of competitors, and we've had reliable internet phone service from companies like Skype Vonage, and even the phone providers like Verizon for a couple of years.

When a company with a radical "idea", that's been around for a number of years, and has a number of affordable competitors, comes in and competes on price, you want to make sure that they actually provide what they promise to.

MagicJack is owned by a corporation called YMAX Communications Corporation. They own two companies - Magic Jack, and SJ Labs. SJ labs is the owner of the "softphone", or the computer software for making phone calls.

Voice communication uses alot of data, and typically requires a very powerful network, especially if millions of people are using it every day. The reason that skype is so successful is because they are running on a P2P network. That basically means that the millions of users running skype are also helping skype keep the network up.

However, it seems that MagicJack doesn't seem to have any issues with voice clarity.

Tuesday, September 30, 2008

Who's the competition for Magic Jack - Vonage Ooma Skype and MagicJack Compared

Magic Jack comes into quite a competitive market. They are facing competitors like Vonage, Skype, Ooma, and the phone companies themselves, offering VOIP solution packages along with the internet connection.

Skype - Skype is one of the most well known and entrenched competitors. In fact, skype was the company that forced the phone companies to offer VOIP services as well. Skype offers a free connection to other Skype users, as well as video phone conversations. Something that still hasn't been offered much with your typical telephone. They also unlimited phone calls to the US and Canada for $3 a month, or $36 a year. Additionally, you can purchase some cool phones that work at any wifi spot in the world.

In short, skype actually has alot more features than Magicjack overall, and only costs $16/year more. However, besides for not being more expensive, skype also never tried to make itself a simple replacement for the landline. There is no simple connection for your regular phone.

Vonage - Vonage is one of the earliest most popular VOIP phone services. They charge approximately $25/month. The most popular appeal of Vonage is their long distance and international services. Instead of having to pay outragous long distance costs or buying a phone card, vonage offers ridiculous pricing worldwide. Magicjack also offers free long distance in the US and low prices internationally. Vonage will probably be the biggest loser to MagicJack.

Ooma - Ooma has been mentioned in the LA Times article last year along with MagicJack. According to the LA Times, Ooma's big advantage is that they don't charge any yearly fee at all. The only fee that they charge is for the phone itself. However, the phone is expensive, at $399 a piece.

As far as news coverage is concerned, MagicJack definitely seems to have the big advantage.

Sunday, September 28, 2008

How Does Magic Jack Work?

Magic Jack is what is called a VOIP (voice over IP)provide. According to Wikipedia,
Voice-over-Internet protocol (VoIP, IPA: /vɔɪp/) is a protocol optimized for the transmission of voice through the Internet or other packet-switched networks. VoIP is often used abstractly to refer to the actual transmission of voice (rather than the protocol implementing it). This latter concept is also referred to as IP telephony, Internet telephony, voice over broadband, broadband telephony, and broadband phone

To be a little simpler, instead of running over your regular phone lines, MagicJack runs over the internet. The beauty of Magicjack is that the installation is so simple to use, and you can use the same phones that you were using before.

They have a little USB device that plugs into your computer, that you can plug your phones into.

However, even though it's so simple; there are a couple of things you might want to be careful about.

1) Make sure that you have a seperate internet line - if you are using DSL for your internet, and it's part of your phone line, you will have to get a seperate DSL line. Many phone companies have a seperate DSL service that you can get instead of the DSL and local phone service. For example, we bought AT&T's standalone DSL service at $20 / month with a 12 month service commitment.

Other options for Internet Service include cable internet from providers like comcast, satellite internet, or through your mobile carrier, like Verizon, Sprint or AT&T. However, these all cost above $35 / month.

2) Make sure you have enough phone cables to connect all of your phone lines around the house. You are going to have to connect all of the phones throughout your house to the USB cable.

If you only have one or two phones, it's fine, but over long distance, you're going to want to reline the house.


Thursday, September 25, 2008

Magic Jack in the news

Magic Jack has alot of coverage in the news. Below is the coverage on MagicJack from CBS:

According to the Magic Jack Website, here's what the press has to say about them:

LA Times: "On one end is a USB connector that plugs directly into the computer. On the other end is a regular phone jack, where you plug in your phone. And that's it."

The New York Times: "A little device called the Magic Jack will let you make calls
from your phone to other phones in the United States... (the magicjack) has a real telephone jack
on the side, leting you quickly bring almost any corded or cordless phone into the 21st century"

The Boston Globe: "A new device, the magic Jack may provide the cheapest way for anyone
to start making calls using an ordery landline phone. It is definitely the easiest to use.

CNBC: "Skype and Vonage Killer. Company must be watched. They have done this in
stealth mode".

BBC: "The Magicjack, which comes with it's own telephone number, offers the flexibility
of making and receiving calls for free wherever the device is plugged around the world"
Laptop magazine: "If you've pondered ditching your landline because of exorbitant
phone bills, magicjack just may be for you. We were pleasantly surprised with how easy
it is to use and the quality it provides for less than $40."

PC Magazine: "MagicJack's call quality is amazing-almost too good to be true. ...
for less than $40, everybody should try it."