The Essential Guide to IP Phones for VoIP

Updated: April 30, 2009

Although it resembles your average, run-of-the-mill office phone with its handset, cradle and buttons, an IP phone is a far cry from what Alexander Graham Bell had in mind. That's because an IP phone sends traffic over a TCP/IP network using an Ethernet connector, and is typically used for VoIP applications. Because it depends on private networks and the Internet instead of traditional phone lines, an IP phone can deliver enormous cost savings and practically eliminate long-distance charges. Other benefits include hassle-free installation, centralized call management, scalability, hot desking and easy integration with business applications.

IP Phones: The Numbers

  • 164 million: Number of IP-phone units that will be sold in 2010 according to research firm In-Stat
  • 10 million: Number of IP-phone units sold in 2006
  • 7 years: Average life expectancy of a legacy phone system
  • $1.6 billion: The market for IP-PBXs last year, according to Juniper Research Ltd.
  • 50: The percent by which the price of IP phones has dropped in recent years

How IP Phones Work

There are a wide range of IP phones available today, from high-priced, videoconference-enabled devices to low-end, standard units . But for the most part, IP phones can be divided into the following categories:

Desktop: Designed for the workplace, today's desktop IP phones typically include single-line access, a limited number of interactive soft keys and a two-line LCD screen with browsing and IM (instant messaging) capabilities. High-end IP phones are also known to feature a backlit, high-resolution, color touch screen for easy access to communications information, XML applications and special features.

Wireless: Wireless IP phones are gaining in popularity with the advent of wireless networks. That's because a wireless IP phone contains a wifi adapter that allows it to connect to a wifi network. And for businesses boasting an existing 802.11 network, a wireless IP phone allows voice and data support on the same wireless backbone. Although slightly more expensive than wired phones, wireless devices can deliver long-term cost savings.

Conferencing: IP conferencing phones offer instant, face-to-face communication between two or more participants. Ideally suited for small or medium-sized conference rooms, these specialty phones incorporate a camera, speaker, keypad and handset in a single unit. What's more, many feature 360-degree room coverage and a backlit 3-by-24-inch LCD screen, and weigh less than two pounds.

Third-Party SIP (Session Initiation Protocol): A third-party, SIP standards-based phone is a low-cost, no-frills alternative that can include more than 16 standard calling features and can be configured to work with the majority of today's IP-PBX systems. These phones typically fall into the desktop category.

High-Quality Audio: There are now several classes of IP phone that offer considerably improved audio quality - at or above CD-quality audio. These phones essentially compress and transmit a much higher level of audio signal. They degrade to the phone's regular quality on the other end cannot handle the signal, but when both phones use the same high-quality standard, the audio improvements are substantial.

IP Phone Benefits

The specific benefits of an IP phone over traditional phones include:

  • Easy routing
  • Enhanced productivity
  • Greater collaboration
  • Cost savings on long distance charges

IP Phone Features

Looking to differentiate themselves from the competition, IP-phone vendors are finding new ways to add value to standard devices. Special features include:

CMC (Client Matter Code): This feature helps businesses such as law offices and accounting firms associate inbound and outbound VoIP calls with specific billing and tracking codes. Specified by a system administrator, CMC can track factors including the length of calls for each client - information which can later be packaged into detailed reports for accounting and billing purposes.

Corporate Directory: IP phones with this feature have a soft key or button which lets users place a call to a number in the directory listing. Listings span from corporate contacts stored in Microsoft Active Directory to personal contacts in Microsoft Outlook. Either way, searchable directories appear right on the phone's display for convenient access. Some IP phones even go so far as to provide users with at-a-glance presence information for an entire corporate directory list so that they can instantly see which co-workers are available or on the phone.

E911 (Enhanced 911): E911 is an enhanced version of the 911 emergency service that automatically delivers a caller's personal information, such as name and address, to a local dispatch center or PSAP (Public Safety Answering Point), as required by the Wireless Communications and Public Safety Act of 1999. While this is really a feature of the phone system, a good IP phone can provide integrated access or one-touch emergency calling.

IP Video: Features including advanced VGA (Video Graphics Array) resolution camera sensors; color and rotatable LCDs; video-call hold, transfer, and forward; video phone book; and video-capture capabilities allow companies to participate in high-quality video conferencing with geographically scattered colleagues and co-workers.

IP Phone Costs

IP phones are proof that talk isn't cheap. A single IP phone can cost upward of $700 - a hefty price tag for a company with either limited funds or a sizable workforce. Of course, prices vary depending on a device's bells and whistles. The objective, however, is to select only those features that promise to address your business requirements and ultimately, cut costs. On the other hand, there are numerous low-end desktop alternatives under $200, although they typically do not have all the features of high-end handsets.

Featured Research
  • What You Need to Know About VoIP Security

    No matter the industry or area of expertise, a strong VoIP system is the perfect tool for any business looking to take both its internal and external communication to the next level. more

  • Are You Using These 5 VoIP Features?

    In large part, the success of your business depends on the strength and reliability of your team’s many communication networks—this includes your Voice over Internet Protocol system (VoIP). more

  • Go Mobile and Increase Employee Productivity

    The Bring Your Own Device (BYOD) and Voice over Internet Protocol (VoIP) tech trends now allow people to work whenever, wherever, and however they want—mobility makes it happen. more

  • [Infographic] How to Select a Phone System in 10 Steps

    Choosing the perfect phone system for your business is no small task …. Depending on the size of your company, the industry in which you work, and the specific needs your phone system will be required to meet, any number of solutions could get the job done. more

  • 2017 Business VoIP Cost Guide

    Reducing expenses is one of the main reasons that businesses switch from traditional office phone systems to VoIP technology. But many people rush this decision and end up spending more than they need to. The costs of implementing a new VoIP system can increase quickly, especially if you don’t strategically plan for it ahead of time. more