Zacks_Analysts' Blog : Apple Approves Vonage Mobile App - Analyst Blog

Internet phone service provider, Vonage Holdings Corp. (VG) recently said that its mobile voice over internet protocol (VoIP) application will be used by Apple Inc. (AAPL) for its iPhone and iPod Touch devices.

 

Vonage also said that it is currently conducting a beta test and expects to announce the availability of the mobile voice app shortly. There were no further details regarding the type of services to be provided or the price and timing of the launch. 


Apple had earlier approved iCall, FriendCaller, Nimbuzz, Skype and Spotify app for its devices and now Vonage has been added to Apple’s App store.

 

All of these VoIP services use WiFi services to make calls. The apps that compete with Apple’s own services had been rejected earlier. However, Apple allowed VoIP apps that can work over WiFi only.

 

We believe that Apple will be benefited from the strong position of Vonage in the VoIP industry but we remain unsure about how different Vonage services will be from other app providers.

 

Carriers like Vonage provide services that are much cheaper than most traditional phone plans particularly for long distant calls, as a result of which consumers frequently change their preferences. Thus, it will be interesting to see how many new customers the Vonage service will be able to get for Apple.

 

Earlier, Apple rejected the Google (GOOG) Voice application from its app store, which is now subjected to an ongoing investigation by the FCC. Apple said that AT&T (T) in the U.S. bars it from allowing a customer to use AT&T's mobile network without explicit permission. This is due to stringent policies from AT&T, Apple’s exclusive carrier that blocks VoIP on 3G network due to quality issues.

 

AT&T would not want further competition from these service providers and may disapprove Vonage’s iPhone app to work over AT&T’s mobile network.

 

While we have several concerns over Apple’s new approval, shares of Vonage jumped approximately 40% after it received approval from Apple.