A VoIP phone adapter is a piece of hardware that supports the use of any traditional phone with VoIP phone service by converting the phone's electric signal from analog to digital. For residential or small business VoIP customers, a VoIP adapter can be a budget saver: VoIP adapters allow customers to use existing phone hardware rather than purchasing new IP phones.

A VoIP phone adapter is a hardware component used to prepare voice traffic for transport over an IP network. Also referred to as an analog telephone adapter (ATA), the VoIP adapter uses a codec (compressor/decompressor) to transform an analog signal to digital, compress it, and packetize it for transmission over the Internet. All of this happens instantaneously.

The resulting data packets are then sent over the Internet. Although they all belong to one voice call, each packet may take a different route to its destination — the flow of information is constantly being monitored, and each packet's journey is optimized to prevent packet loss, jitter, or delay.

VoIP adapters also perform the same process in reverse when a digital call is received on a VoIP phone system connected to a traditional phone handset. The VoIP adapter takes the packets of data, reorders them according to the instructions included in the packets, reassembles them, and converts them into an analog signal that the phone can process.

Most VoIP adapters support the open-source session initiation protocol (SIP), so they can be used with a wide range of Internet phone service providers.

A VoIP phone adapter is a good way to limit expenditures. A residential user with a VoIP phone service such as Vonage or Skype is more likely to use a VoIP phone adapter than to purchase a special and costly IP phone — especially as a basic VoIP phone adapter comes included with Vonage residential VoIP phone service.

One of the reasons to use a VoIP phone system is its relatively inexpensive cost, especially as compared with more traditional phone carriers. If cost (and maybe portability) is one of the motivating factors for Internet phone service, most consumers will want to limit or eliminate their investments in anything but the phone service itself.

That budget-driven decision usually extends to the purchase of IP phones. Otherwise, buying phone hardware on top of the VoIP phone service, especially when they have perfectly good phones lying around, might seem like it defeats the purpose of Internet phone service.

IP phones offer a lot of advantages, but they can be quite expensive. Grandstream produces some of the entry-level models, such as the GXP 1100 with no Power over Ethernet (PoE), which can be found at Newegg.com for $34 (July 18, 2012). Fully loaded, high-end Polycom phones, such as the SoundPoint IP 670, can retail for $419 at athq.com (July 18, 2012). IP phones for conferencing and with video screens can cost even more.

If a VoIP adapter can help customers with Internet phone service avoid buying an IP phone, one question that might occur to most people is: What is an IP phone?

An IP phone is one that includes all the necessary hardware and software (codecs, for instance) in the phone handset, and will automatically convert the analog signal to digital and then packetize it for distribution.

IP phones plug into the Ethernet, and in a work setting can be programmed with all the information relative to an individual employee. That way, the phone can be moved to a new cubicle or office simply and easily, and all the employee's information travels along with it.

IP phones can be integrated with Outlook and other programs such as call center applications, providing better CRM support.

IP phones typically require a separate power source, however — either a power brick or a Power over Ethernet (PoE) device such as an adapter or injector.

A VoIP phone adapter is not an obscure piece of hardware used in VoIP phone systems. There are many places — online and brick-and-mortar — to purchase ATAs. They can be bought online at VoIP hardware specialists, computer supply warehouses, and online marketplaces such as:

• VoIP Supply
• Amazon.com
• VoIPlink.com
• Newegg.com
• TigerDirect.com
• VoIPHardware.com
• VoIP adapters can also be bought at neighborhood big-box electronics stores such as Fry's and Best Buy, or even small specialty shops such as RadioShack.

Before buying a VoIP adapter, be sure to verify which makes and models are supported by your VoIP service provider. Armed with a list of provider-supported VoIP adapters, check online product reviews for performance and price assessments to ensure the best investment of your IT budget.

Reviews of VoIP phone adapters can be found all over the Internet. The obvious choice in most cases is Amazon.com, although Best Buy and other e-commerce sites also feature user reviews.

Some sites such as The Gadgeteer or CNET also feature technical reviews by staff writers, who sometimes benchmark the products against other similar models.

VoIP adapters are typically used by residential customers, or small business customers with under 20 employees. Small office/home office (SOHO) customers also frequently use ATAs.

VoIP phone service customers with a limited budget and IT resources are the primary candidates for VoIP phone adapters.

Many small to medium businesses (SMBs), especially those with more than 50 employees, are likely to pursue other options rather than VoIP adapters. They might invest in IP phones, or consider using softphones that integrate with their customer relationship management (CRM) applications.

SMBs might also be more likely to invest in a larger appliance that will handle signal conversions en masse, such as a VoIP gateway, channel banks, or a SIP trunk.

A lot of well-known brands in computer hardware also produce VoIP adapters, especially as some VoIP adapter models often integrate routers. Some of the big-name companies making VoIP phone adapters include:

• Linksys
• Cisco
• Motorola
• Obihai
• Grandstream
• AudioCodes

Some VoIP adapters are intended only for use with a particular VoIP service provider. In this case, the ATA adapter is marketed as the key to inexpensive phone service, rather than a tool that makes VoIP phone service possible. The Internet phone service is usually bundled with the adapter and billed at an extremely low annual rate.

A magicJack, often advertised on TV, is really a proprietary VoIP phone adapter that's used exclusively with magicJack Internet phone service. The magicJack commercials emphasize that customers pay for the magicJack or magicJack PLUS adapter and get the VoIP phone service for as low as $20 per year after one year of free service (see magicJack for specific pricing details).

The Ooma Telo phone system is essentially another proprietary VoIP adapter, although it's much sleeker and fancier in design than the magicJack. Like the magicJack PLUS device, the consumer buys the Ooma Telo adapter for a base price of $199 and then pays a minimal fee for telephone service (in the case of the Ooma, just applicable monthly taxes). Ooma also sells a set of Dect 6.0 IP phones for use with its system.

The NetTalk Duo is another branded VoIP adapter. The NetTalk Duo, Duo WiFi, and Duo II are all ATAs advertised for a small, one-time fee (prices range from $34.95 to $64.95) and tied to exclusive Internet phone service through NetTalk.

When the VoIP adapter is sold as the service rather than something that facilitates the service, the VoIP user is often locked in and may incur additional charges if the device is broken or damaged. magicJack, for instance, requires customers to buy a new magicJack device, and thus a new service contract, even if the customer already purchased a 5-year contract. Details vary per provider, so be sure to read the fine print.