MagicJack Climbs VoIP Ranks
By Greg Scoblete -- TWICE, 6/30/2008
West Palm Beach, Fla. — Telecommunications firm YMax is on track to reach 550,000 subscribers by June through its MagicJack VoIP phone and will begin selling the device through QVC next month, said company founder Dan Borislow.
The VoIP newcomer is selling roughly 8,000 MagicJacks a day, Borislow said. Each $40 device comes with a year’s worth of unlimited nationwide calling (inbound and outbound).
At 500,000-plus subscribers, YMax would vault ahead of every pure-play VoIP provider, save Vonage, currently the No. 1pure-play provider with roughly 2.6 million subscribers. YMax will know whether its customers will renew their subscriptions starting in January and February of 2009, a year after the MagicJack began to roll out to a large audience, Borislow said.
Launched last year, the MagicJack plugs into a computer’s USB port and features an RJ11 jack for connecting a traditional home phone. The service supports caller ID, voicemail, voicemail-to-email and call forwarding.
The device works when the computer is on and will forward inbound calls to a cellphone if the computer is off.
The company’s hook is super-low-cost calling. After the first year is up, it costs $20 for a full year of nationwide, all-you-can-dial calling.
“We originally thought that business travelers would use this, but what we’ve found is that in these economic times, people are desperate to get rid of their landline phone,” Borislow said. The most MagicJacks have been sold in Florida and California, respectively, where economic times are tough, he added.
They’ve also been embraced by retirees looking to minimize fixed expenses, he said. “People are under the impression that older people wouldn’t understand the technology, but that’s not true. They’re retired and they have time to experiment. It’s the people between 50 and 60” who tend to be techno-phobic, Borislow noted.
The company plans to move the MagicJack through traditional brick and mortar channels in the future, Borislow said. When it does, the MagicJack will be sold as a hardware device and not a service that provides a retailer with recurring revenue when a calling plan is activated.
“That model of service doesn’t work,” Borislow said. “[Retailers] sell the jack and they make a good margin — it will sell more than Vonage and Packet8 and the other fly-by-nights,” he said.
Since its launch, some have questioned whether a company offering phone service for $20 a year can forge a sustainable business. According to Borislow, YMax is more than just the MagicJack — it earns revenue from the search functions on the software that loads onto user’s PCs and is also a Competitive Local Exchange Carrier (CLEC), reselling phone numbers to other service providers.
“We spent years building a network before launching the product,” he said.
Indeed, he said the consumer-oriented MagicJack was just a first effort to go after “low hanging fruit” in the communications market and that other services and devices are coming.
“We’ll have a Skype-like service for calls without the jack,” Borislow said, as well as a device for the enterprise market.
The company has several patents pending, including one for a wireless MagicJack that lets users with wireless networks have access to the service whether their computer is on or off, Borislow said.
“Rather than have them try to plug it into a modem and figure out where the Ethernet cables go, they can just plug it into the wall and it self-configures.”
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Don't deal with Themagicjack.ca. Victor Rosettani does not refund the money, even after the email from him say refund will be issued within 30 days. I asked him for a Canadian Number for my MagicJack as advertised on his website in July 2009. I paid him the money. In fact, those numbers were not available and he asked me to get a refund.So far no refund for more than a year.
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Miyoshi Dowden - 2009-22-9 00:07:40 EDT -
would not recommend this company to any one they shady business practices. I ordered this majic jack with the understanding that my card would not be charged for 30 days. Low and behold a charge immediately on my card for 93.80. I emailed them the next morning only to be told it wasn’t in their system yet and I had to wait for 24 to 48 hours. I waited then emailed them again, they then said they were updating their system. I received a confirmation email from them which stated if I did nothing the magic jacks would be mailed, or I could reply to the email if I wanted to change the order. Well, I replied to that email and told them, I had not worked in months and thought my card would not be charged for 30 days. I told them all I had in this world was 100.00 for my children for Christmas and I needed this order to be cancelled and the money placed back on my card. Thinking it was taken care of because I did what I was asked to do, then on top of that I chatted with a live person. I was told it would be taken care. I got home today to an email from Magic Jack telling me the order was shipped. I immediately went back online and chatted with a manager, all they could do was apologize and tell me to refuse the package, and when they get the package back they will refund the money back to my card. Christmas is in 2 days, Thank you Magic Jack for my children waking up Christmas morning with NOTHING under the tree. If I thought the card would have been charged right away I would have never ordered it, they lied and then they didn’t honor their promise. I don’t care how much extra it costs me for a regular phone, I will never get this product.
Lorraine Reid - 2008-23-12 19:09:00 EST -
I bought a MagicJack several months ago-it caused my computer to crash, cost my phone service and lost contact, refused to stay on the computer and took me a long time to get resolved. I finally received a grudging consent to send me a replacement at no cost if I returned the old jack. I got the email 11/10/08 that the replacement was being shipped, got a return lable for the old jack and an email stating I had two weeks to return the old jack before being charged. I noticed 39.95 has been taken from my account and when I tried to contact someone to help me with this, I was told I had better return the jack if I wanted my money back, there was no one to complain to and they could take whatever they wanted. This is not a company I will deal with again. Not only do they sell defective proucts, they go way out to be sure they don't lose any of the money they have gotten.
Gail Rogers - 2008-10-11 21:22:00 EST -
Lets get a little real here. What can you expect for $20 a year? Well I have a router on my network and the calls all had a lag of one second. So i replaced my old router with a newer one with QOS and it helped but not that much. I then bought a device called a Hawking Broadband Booster HBB1 and enabled it and the routers (Linksys) QOS and thew lag is gone. the Hawking device is a lag illiminator. Now the magic jack is like a real phone service. Before this. it kinda sucked. Oh and I had to disable the windows QOS in the network settings. So in conclusion my system is 6 years old, with a router linksys BFSR41 ver.4.3 and a Hawking Broadband Booster HBB1 connected to a Magic Jack and it work great now. The Hawkings Broadband Booster HBB1 made all the difference.
Vinnie V. - 2008-25-8 22:59:00 EDT
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