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Vonage's Peculiar V-Phone

Editor's Rating: star rating

The headset-and-memory-stick combo lets you make Internet calls on the go, but it requires a PC linkup and the service plan isn't cheap

Vonage's V-Phone is a curious device. You plug a headset microphone into the bullet-shaped memory stick. You then plug that memory stick into any Windows personal computer that is connected to the Internet and use an on-screen soft phone and your mouse to take and make calls to any phone number around the globe.

It's that simple, and a great way for frequent travelers to make relatively cheap calls without the fuss of carrying around cellular modems and the like.

On a recent trip to Japan and South Korea, the bright orange V-Phone worked moderately well. Calls sounded fine in the earbud headphones that came with the memory stick, though people on the other end complained my voice sounded far away until I placed the microphone on the wire directly in front of my mouth.

On the screen, you get nice features such as call waiting, call forwarding, and caller ID, and can redial numbers quickly thanks to onboard memory that saves the most recent calls even after you unplug the device from the computer.

Pricey and PC-Fettered

Try as I might, though, I have a tough time figuring out the long-term usage model for the V-Phone. Pay-as-you-use services like Skype let you do the same thing, delivering much the same sound quality, and don't require what can amount to an expensive annual bill.

With the V-phone, you must first pay $40 for the USB stick, then pay either $15 a month for 500 minutes, $25 for unlimited residential use, or $35 for unlimited business use. By way of comparison, an unlimited calling plan on SkypeOut will cost you just $30 for a full year.

But say you love Vonage. I have the service at home and think it's pretty good. But there, I don't want to be chained to a PC while talking on the phone and use a voice-over-IP phone adapter for my cordless products around the house.

Why not allow current customers to use the V-Phone as a virtual phone or extra line when you're traveling for an additional $5 a month? That would be a truly great way of taking your phone with you, but Vonage does not allow for it.

Until it does, the V-Phone seems to me to be a great device with a very limited market.

Edwards is a correspondent in BusinessWeek's Silicon Valley bureau.

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