Sidecut Reports

I’ll leave it to those who have more time to spend with SEC documents than I do right now to sort out all the details, but the initial public offering hinted at by MagicJack founder Dan Borislow last summer has sort-of come to pass, with the announcement of a merger between MagicJack’s parent company and VoIP gear supplier VocalTec, which trades on the public markets.

As befits a Borislow operation, there’s a whole lot of murkiness and mess involved — gotta love the line from the SEC filing that flashes a big red light over any and all proceedings, mainly to do with the fact that VocalTec isn’t a U.S.-based company so doesn’t necessarily have to play by NASDAQ rules. From the merger SEC filing, we quote:

We are a “foreign private issuer” and you will receive less information than you would about us from a domestic U.S. corporation. In addition, we have opted out of certain Nasdaq Marketplace listing requirements.

With the caveats out of the way, what else is interesting about MagicJack? According to the fiscal numbers, MagicJack did indeed have a $100 million revenue year in 2009 as Borislow predicted when we talked to him last — it was actually $117.8 million in revenue according to the document — but the company also incurred a loss of $22 million for the year, mainly due to huge costs like those of the MagicJack devices sold ($23.4 million), advertising ($32.1 million), network and carrier charges ($25.6 million) and $41.8 million in “General and administrative” charges, which seem quite high for a smallish startup of MagicJack’s nature.

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Normally known for his intelligent takes on all matters regarding telecom policy, our pal Harold Feld shows his technology and market chops with an excellent post today about why he thinks the so-called “death of WiMAX” may be a precursor to a long, active afterlife.

You should, of course, read the entire wonderful post but to sum up Harold’s points — WiMAX may be surpassed by Long Term Evolution (LTE) as the eventual 4G market “standard,” but that’s not going to happen for awhile and with lots of gear and services deployed, it’s not like WiMAX is going to disappear off the shelves like Betamax tape players. A great post to bookmark and remember after all the “death sentences” for WiMAX inevitably appear.

While we still don’t have any concrete details on how many HTC EVO 4G smartphones Sprint has sold so far, it’s safe to assume that a lot of them have gone out the door — and according to a Sprint exec at a WiMAX symposium Tuesday, some 40,000 of those devices are now using the Fring application for mobile video and voice calls, spending an average of eight logged-in hours per day.

Nathan Smith, with Sprint’s developer program, dropped the Fring-usage nugget on a crowd of about 150 or so developer and VC types who each paid $25 to attend a full-day WiMAX symposium at the engineering school on the verdant Stanford campus here in Palo Alto, Calif. While introductory keynotes from execs at Sprint and Clearwire didn’t do much than reiterate already known facts about the partners’ nascent national WiMAX network, Smith’s presentation and a related one from Clearwire’s products and services VP Dow Draper got a little more in-depth on where network use is headed, and why the EVO launch was so important to getting developers interested.

Draper said that in talking to developers about WiMAX, they would say “that’s great, but where’s the phone?” With the EVO already commercially available and more 4G phones promised from Clearwire before the end of the year, it’s a safe bet that Draper’s contention that “4G will enable video to become the ‘new normal’ ” may be a conservative statement before too long.

The immediate jump of users to Fring, a Skype-like program that is already available on Android platforms like the HTC EVO 4G, is proof that “people are using the devices for video,” Smith said. Sprint has also signed up streaming-video provider Qik as a partner for the HTC EVO.

Om said it best in less than 140 characters: “If i had to buy an iPad, I would buy a WiFi one with a Sprint MiFi. Who needs to blow money on a crappy AT&T 3G connection.”

His late Wednesday tweet summed up perfectly my reaction to the Apple iPad’s pricing for a model with connectivity to AT&T’s 3G cellular service: Why would you pay an extra $130 “3G tax” for the privilege of connecting one device to a network whose underpinnings are still suspect? Especially when you can get a mobile Wi-Fi router, either in the slim 3G-only version or in the beefier, brawnier hybrid 3G/4G configuration — and have better connectivity for your iPad and four other devices?

From AT&T’s standpoint, the pricing structure makes sense — by making it a high leap over the base iPad price, you can guess many folks will opt not to spring for a 3G version, especially since (unlike an iPhone) this device is primarily designed for content consumption or creation, and not necessarily for communications. (Though we fully expect Andy A to be the first to use it in an airborne Wi-Fi/VoIP configuration)

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Nothing like a fun rumor to keep things cooking during the normally dormant holiday season: Hearing more about the rumored “Google Phone,” which TechCrunch’s Mike Arrington now says might be a “data only, VoIP driven device,” and thinking that it sounds like something built for WiMAX, especially so since Google is after all still a major investor in WiMAX provider Clearwire.

Though Google did not participate in the latest funding round for Clearwire, we’ve been waiting for the Android shoe to drop into the WiMAX market — and it would seem to make sense that a Google-produced device with WiMAX support might be the way the search giant helps “fund” the Clearwire buildout, by paying itself to put WiMAX connectivity into the device.

Increased data consumption, over-the-top VoIP, and lotsa video — sounds like a prescription that calls for a beefy connection like WiMAX on the back end. For the slow-to-grow Clearwire network, a new cool device like a GooglePhone would be just what the doctor ordered.

UPDATE: Tricia Duryee at mocoNews thinks the way we do. And we agree: Things could get a lot more interesting!