January 23rd, 2009
Verizon's Hub: Another way to fight iPhone churn?
Verizon Wireless today announced a new product that goes after an old market - the landline home phone crowd.
There aren’t a ton of details yet about the Verizon Hub - but stay with me here for a minute while I go out on a limb for this product. I could say that it has potential to revolutionize the home telephone - but that’s been already been done on so many facets (wireless, voip, digital) that it seems silly to even go down that path. Instead, I wanted to look at this product from a business perspective, specifically as another tool for customer retention and loyalty. Before I get to that, some details on this new Hub.
From the image, you can see that it’s a cordless phone connected to a video touch screen. Of course, it’s broadband powered and connected, so the voice service is coming in via the Internet and the content on the screen - current weather, traffic conditions and even “yellow pages” listings - is the same information you’d get from your laptop browser. The Hub also incorporates the home phone voicemail, which I would expect to take a cue from the touchscreen visual voicemail offerings on an iPhone. It interacts with your wireless phone by sending things like calendar alerts and turn-by-turn directions directly to the mobile device. And a companion Web interface allows users to set up the hub - such as populating it with your own contacts - from any computer. When it’s not in use, the screen turns into a digital picture frame of your personal photos (organized from the web companion and/or uploaded from the wireless phones on the account.)
For $35 a month, users get a home phone line with unlimited calling in the U.S. with all the standard features (call-waiting, caller ID and so on.) They also get a sub-account on Verizon Wireless, which means that calls from the Hub phone to Verizon Wireless subscribers are treated as mobile-to-mobile calls that don’t get counted under the pool of peak minutes you pay for. And for those of us who still have traditional home phones, $35 is a pretty good deal for the phone service alone.
I could see where some people would turn their nose up at such a product. A lot of users have already abandoned the home landline phone and stick with their wireless line. WiFi connected laptops already provide us with instant access to information like traffic and weather. And, of course, web-enabled smartphones give us the freedom to stay connected no matter where we are.
But from the business perspective, there just might be something to this. Churn became a bit of an issue for Verizon following the launch of the iPhone on the AT&T network. For some people - I’m thinking those who have one line on their account - it’s probably easy to bail out of a contract and switch. But there’s also a growing number of family plan subscribers like me. I have five lines on one account and, one by one, the wife and kids are asking for things like unlimited texting, mobile web service and, of course, the cool new devices that force me to re-up my contract. Ka-ching. Ka-ching. I feel like I’m never going to be able to break my ties with Verizon. (That’s what they want to hear.)
I don’t know if this Hub will gain a ton of traction but I do applaud Verizon Wireless for launching something other than a new smartphone-of-the-month. I just hope they can build on it and take it to the next level - think apps. For now, the address book and photo albums are all managed on Verizon Wireless apps. That means that it won’t be integrated by my Gmail contacts or my Flickr photo album. Verizon isn’t saying what the future holds but it seems to me that the company has lightened up a bit when it comes to proprietary tools. Open source application development is hot these days and I can’t imagine that Verizon will keep this hub behind the wall for too long. With WiFi and touch screen, one can only hope that add-on apps would something for a version update down the road.
The Verizon Hub is scheduled for release on Feb. 1. It will be priced at $199, after a $50 mail-in rebate and two-year service contract. It comes with one phone handset and additional handsets will run $79 each.
Sam Diaz is a senior editor at ZDNet. See his full profile and disclosure of his industry affiliations.
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