The worlds of computing, communications, and consumer electronics are merging. Consumers use their PC's as phones, and phones as PC's. The facilities, software, and services they have in the office, they want at home. And it has to be easy to setup and keep working.
The telecommunications service providors - Telstra, British Telecom, AT&T - have fully digital networks capable of providing internet connections to all subscribers. It is currently not in their perceived best interests to pursue this. They are milking the 'Plain Old Telephone Service' cash cow for everything it is worth.
Network computing, LAN's, has fully penetrated the corporate and SOHO/SME world. Intranets are exploding and taking their vendors with them. Their use doubles at least every 9 to 12 months. The wider internet has been doubling in size - as measured by connected hosts - every 9 months for the last 5 years. This growth has been driven by the World Wide Web, low PC prices, and the proliferation of ISP's.
On the corporate desktop, Internet connectivity appears to be trivial - plug in a LAN connector, load a browser and you're away.
There is pent-up market demand for a domestic and small business version that is as simple to use and reliable as the complex infrastructes setup and maintained by largish teams of professionals in larger organisations.
The Netserver is a simple pre-configured box that is as easy to install as a stereo, will support multiple terminals, and is supported by merchants offering a range of standard access plans - just like mobile phones.
The netserver with internet access alone will get no less than 10% market penetration - more likely 20%-40% penetration into the home market, and 60%-80% into the SOHO and small business markets. The market model is fax machines, from a 1984 start, they achieved almost 100% business penetration in under 5 years.
Providing full telephone services concurrently will increase home market penetration to 80%-90% in 5 years and 100% in the SOHO, small business market in 3 years.
Internet phones use only 10-12kbps bandwidth, and only when there is speech. A $120 modem gives a 33.6kbps connection - between 4 and 6 simultaneous phone calls, or 'virtual phone lines'. The biggest Telco growth market in mature markets is installing a second phone line - for fax and internet use mainly - and so parents can dial out when the other line is busy. And in older, richer established suburbs not being able to get a phone because all the existing copper is used is becoming far too frequent.
For SOHO and small businesses, about $1000 per year will buy a 160kbps service - or 30 - 40 simultaneous phone calls.
Because a Telco can reduce their telephony bandwidth needs by 10-16 fold they will be able to offer substansially cheaper telephone calls. It will also be that much cheaper for a new Telco to setup in an existing or new market.
As well, the internet equivalent of telephone exchanges, 'routers', are about 10 times cheaper.
The internet has always operated with two funding notions - end-users provide all their own equipment, they bear the capital cost of the connection, and access is pre-paid like postage stamps.
If telephony companies adopt these notions, they move from being big credit providors and massively reduce their capital requirements. This futher reduces their costs - per call, billing systems comprise 50%+ the costs in a telephone network.
SOHO and small business users benefit by only needing a single Telco line, not separate fax, modem, multiple business phone lines, and a personal line. On top of this, they get all the benefits of a PABX - including voice messaging and menus.
Full production software, based around a laptop will take another 6-9 months with a substansially larger team. Cost should be $1M - $1.5M.
Final marketing to the major consumer electronics and games manufacturers may cost $5M - $10M, over 3 to 5 years.
Full scale revenues would be between $5M/year and $1250M/year. [$5M == 10% Australian home market (650,000 users), 7 year replacement, and $50/unit] [$1250M == 80% global markeet (250M users), 5 year replacement, and $25/unit]