Magic Jack – A Recession Winner

Magic Jack seems to be on a roll and the roll could make the folks at Magic Jack over $100 Million this year. So what makes Magic Jack so attractive? How about local and long distance calls for as little as $20 a year. Who is buying Magic Jack? Will according to a recent article it is the older people who are trying to save a few bucks.

The company is selling about 9,000 to 10,000 MagicJacks a day, according to Borislow, and customers are using about 500 million minutes a month. The company will do more than $100 million in sales this year, Borislow says, and is cash-flow positive.

Who’s buying MagicJacks? Many older people, so far, especially in retiree or seasonal-living states like California and Florida. (The company’s average customer is over age 50.) And about 20% of its customers are overseas — ex-pats or foreigners who want to make cheap calls with America.

But Magic Jack has a few other tricks up their sleeves:

But MagicJack is working on cool, new tech, too: A wireless base station for your home called a “femtocell” that lets you use your GSM cellphone — perhaps even Apple’s iPhone — with MagicJack’s service. The company also promises that number portability — get your current number to work with MagicJack — is coming this year.

There is another interesting point on how Magic Jack makes their money. The folks at Magic Jack get their numbers for free while others have to buy them. When a customer from another phone company calls a Magic Jack client, Magic Jack gets to bill the other company. Nice.

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I have been writing for Lockergnome for eight years.