Vonage Puts Phone on USB Stick

Vonage is expected to unveil a new device as early as Wednesday that would allow the user to turn any computer into a phone by attaching a USB memory drive preloaded with voice over IP software. The company today held an event for press in New York City.

When the device, called the V-Phone, is plugged in to the computer, the software would automatically launch. Vonage isn't the first to offer such capabilities, as several companies are already marketing similar products.

The closest comparison to what Vonage appears to be doing is U3. That company markets special USB drives that allow a user to carry, store and launch applications directly from the drive without any installation on the hard drive.

Customers will be able to plug standard cell-phone headsets directly into the V-Phone, and Vonage will supply one with the device. Each V-Phone is tied to a specific Vonage account and phone number, which is pre-loaded into the software.

The V-Phone will initially only store the Vonage software, but the company plans to release future versions that would allow users to store extra data. The USB drive would retail for $40, and would be available to those who sign up for Vonage service.

Vonage's V-Phone marks the first attempt by the nation's largest Internet telephone provider to generate interest in its products after a disastrous initial public offering in May. Since then, the company's stock price has fallen by half, and it has been taken to court by investors in a class action lawsuit.

Plans by Vonage to release the V-Phone were first reported by the Wall Street Journal on Wednesday.