The Linksys/Vonage Router Deal: Is Linksys "Marrying Up?"

In research I performed earlier this year for a private client, I became very familiar with the wireless network router and gateway plans of leading players such as Cisco division Linksys and a host of competitors.

As a group, we concluded that Linksys was going to be the router/gateway provider with the strong consumer focus. Their distribution channels would be big box retail (as it is now), coupled with low price deals with ILECs too cautious to cap-ex with pricier suppliers such as Netopia, for instance.

But maybe, after today's bigannoucementwe need to rethink strategic assumptions a bit.

Now today comes the announcement that Linksys is partnering with Vonage to offer a Wireless-G Broadband Router with 2 phone portsbundled with Vonage's service. Vonage and Linksys both say the Wireless-G Router will be available at over 7,000 retail locations nationwide and through select e-tail partners. The Router's model number is WRT54GP2.

It's already "in the channel," as marketers like to say. Just cruised over to the Circuit Cityand Best Buy Web sites.Each knocks $20 off the $149.99 list price, with a $50 rebate check coming at ya. I Froogledfor you (what a guy!!)and found out of the box prices as low as $100 or so, but without rebate.

Vonage CEO Jeffrey Citron said in a statement that the deal has been done in (recognition) of"the need for residents and small businesses to have myriad of options when setting up their networks."

OBTW, Jeff's grammar is correct. It is myriad, not a myriad.

But is his strategy correct? Ibelieve this is a bold move on the part of both companies. Linksys gains cred by affiliating with an industry leader in a growing, innovative andprestigious space, and Vonage gets amazing distribution. At retail, Linksys owns the rack, and has even before they were acquired.

I can even see some retailers getting involved in further price-centric subscriber sign-up promotions. Wireless-G broadband router purchasers, as well as VoIP subscribers,still somewhat tend to be technology friendly early adopters. So why not combine strengths and market appeal?

But I do know that some of you prefer other routers. You may deny it, but for at least a few of you, it is a "class" thing. So my question is, does the Vonage-Linksys solution change any of your assumptions about either suppliers' equipment?