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MagicJack Impact – How One Tiny USB Device Changed The VoIP Industry FOREVER

Few products have changed market dynamics in tech market as MagicJack has in the Voice over Internet Protocol (VoIP) domain. While the internet market was still exploring long-distance calls at an affordable price using software based services like Skype and GTalk – they came with a price-tag, not entirely justifying retiring your resident landline or cellphone. Ditto for NetTalk, another VoIP service which didn’t quite measure up with the audio quality. Cellphone plans too, were free for certain carriers within their customers, but mostly had customers waiting for those ‘nights and weekends’.

original magicJack

Figure 1: The Original magicJack device (2007) which arguably ushered in a new era for all VoIP Services

Introduced in 2007, the USB based MagicJack device immediately surged in popularity owing to twin benefits of promising truly low-cost alternatives to monthly phone bills and a very affordable price-tag. That, coupled with the rapid evolution of smartphones forced the existing players in internet based call market to improvise. Their impact was immediately visible as competitors felt the heat. Some of the prominent changes which ensued were:

  • NetTalk immediately invested in Video over IP technology – something which remains their calling card to the day. Despite other comparable features, customers agree that the MagicJack threat truly had them kick on to innovate
  • Skype has since then undergone overhaul of sorts in terms of video and audio quality, connectivity and overall user interface. File transfer speeds, which were painfully low even as late as 2008/09 have surged since. Controls are much more intuitive right now, though their international calling charges still keep them from truly challenging MagicJacks insanely low overseas rates.
  • With the advent of Smartphones, all of these services rushed to develop their proprietary applications. Several connectivity applications like WhatsApp have come along with free text, message to SMS, and file transfer bundles
  • Even resident phone plan services and VoIP options like Vonage have massively slashed their international calling rates, even offering unlimited calls to any country for around $9.99 for the first few months after sign-up. Further feature addition involved supporting fax lines in addition to the primary phone line.
  • Major Cellphone carriers steadily brought down their ‘bundle’ costs including unlimited text messages and favorable internet data plans as the market for Smartphones improved. Though support for international calling, and calling outside of proprietary carrier devices has remained underwhelming.

Such an explosive market activity was at once, both a tribute and a challenge for MagicJack to keep up with their sensational debut. They had been favorably reviewed by the PC Magazine in 2008, but their one-dimensional customer service which relied only on web-based chat pulled down the ratings in the months that followed. NetTalk and Vonage were quick to latch on to those and highlight a superior customer service.

Far from being cowed, however, MagicJack came back bigger and better in 2011/12 with their snappier version MagicJack plus and an even better upgrade MagicJack Plus 2014. Then in late 2014 they came out with a free calling app and the MagicJack Go which improved further upon all of their previous devices. It was impressive to note that MagicJack didn’t veer away from their unique selling points, ultimately keeping the word-of-mouth positive among their loyalty customers. Some of the major upgrades included:

  • Even better call quality – Their research and investment on providing high quality calling, minimal echo, lag or white noise paid back in spades as the customers firmly gave their verdict in favor of MagicJack compared to Skype, Vonage or NetTalk. Only Ooma, among newer competitors match the quality somewhat, but then they come with a much higher price-tag.
  • Unique pricing strategy – Unlike Vonage which has the adapter for free and charges a high service fee annually, NetTalk which has hidden service charges for additional features, Skype or GTalk which have international calling charges at higher than regular phone call rates, MagicJack allows you to call or receive for absolutely FREE between its devices in U.S., Canada and Puerto Rico. Receiving calls is free even internationally, and only a nominal calling charge. Their newest device costs a one-time fee $59.95, but that comes with a year free calling bundle and the free app. The operating expenses over long-term is well ahead of the pack at $35 per year. Of course, you may commit for five years and further cut down on costs to $19.95 per year.
  • Hardware Innovation – Even on hardware front, MagicJack stayed at a comfortable size, eliminated the need for a computer beyond the initial registration (with ability to be plugged in directly to internet source – router or modem) at, and was the first to innovate a direct wall-plugin adapter. That ensured you don’t have to tote an adapter cable. Their 2014 device version also added additional USB and SDIO ports with promise of Wi-Fi capabilities in future as well as possibility to add multiple lines from a single device. The TigerJet chip set (TJ980 and TJ880) ensured faster processing speeds excellent HD audio and on-device memory.
magicJack Plus 2014 vs magicJack Plus

Figure 2: New MagicJack Plus 2014 vs MagicJack Plus 2011

  • Customer Service improvements – Despite initial setbacks about a single-channel customer service, their web based chat has found acceptance in being reliable enough. By contrast NetTalk, who leveraged their toll-free numbers, emails etc. were booked under BBB for being unresponsive. Vonage customers complained of long queue times on phone etc. Turns out, master of one trade is indeed better than jack of all.
magicJack Plus 2014 wifi slot

Figure 3: SDIO port for MagicJack 2014

  • Free features and simple installation – Several of their features like call forwarding, emergency dial, smartphone apps, call block and caller ID etc. are devoid of hidden costs unlike competing services. On the flip side, MagicJack demands internet speeds upwards of 128 Kbps, compared to Skype and Vonage who can both work at a minimum of 64 Kbps.

On the whole, it is quite evident that the arrival of MagicJack to the VoIP tech-space not only gave customers a market leading device which continues to be one of the best analog calling devices (if not the best!), but it also sped up the cycles of competitive improvement and heralded new innovations for VoIP devices and internet based calling on the whole. Taking into account price, features, hardware and portability – MagicJack still remains the best all-round device.

Over to MagicJack Go now, to up the stakes on both technology and customer service. As cutting edge research begets addition of more features, it can only mean better services and devices for the end-users in the future.