Killing the home phone (VZ)

Verizon (NYSE:VZ) has decided to eat its own young. The company will introduce a wireless internet phone aimed at the home market. Verizon has been seeing its landline business shrink as consumers move to VoIP and wireless handsets.

According to The Wall Street Journal, "The new home phone, called the Hub, aims to retain existing landline customers and attract other carriers' customers, the company said." Why go to all the trouble of switching people from a phone with a cord to one that is wireless?

Verizon has been losing home customers to cable VoIP for years. And, many wireless customers have been using cellphones at home and killing their landline service. The new "Hub" has features including streaming video capacity and the ability to access data over the internet. But, the unit costs $195 and subscribers must take out a two-year, $35 a month contract to get the new product.

That service contract is why the product will be a failure. As 3G networks get better, the cellphone becomes an excellent alternative to a landline phone. Buying a second phone, which is essentially another wireless product is unnecessary and expensive. Current wireless handsets can already get video and data. Another product with similar capacities is just redundant.