Ooma's price cut, Best Buy deal spurring sales

Ooma is reaping the benefits of sweeping changes it made to its price structure and distribution model, according to the San Francisco Chronicle. Ooma initially priced its free home phone service device, the Ooma box, at $399, but has since dropped the price to $250. The Palo Alto-based company also expanded to stock its device in big box retailers like Best Buy and is now available in more than 1,300 locations.

"Ooma's as close as you can get to recession-friendly," said board member and investor Tim Weingarten, a partner of Worldview Technology Partners. "People are trying to cut down on recurring bills as much as possible in order to increase savings, and one way to do that is reduce your phone bill at home."

Ooma interim CEO Rich Buchanan predicted profitability and around $20 million in sales by the end of 2009. The company is trying to add to that revenue figure with a premium subscription service that adds another phone line and other features to the Ooma hub for $12.99 per month or $99.99 per year.

Analyst Ross Rubin told the Chronicle that despite its ill-conceived initial price tag, Ooma should see growth during the recession as customers are drawn to its cost-savings argument.

For more:
- see The San Francisco Chronicle article here 

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