IP Phone means an Internet Protocol Phone. It allows the user to speak over IP networks such as the Internet or the Intranet. It is also known as Voice over Internet Protocol, Internet Phone, Web Phone etc.

The traditional phone transfers voice through circuit-switching method wherein the caller and the receiver are connected through a continuous electrical circuit. Here voice transfer is pretty slow because data is transferred as it is in huge chunks. There is also the danger of data loss in this system due to frequent reception problems in case of long distance calls.

The IP Phone transfers voice through packet-switching network wherein analog voice signal is converted into digital format and is broken up into minute data packets. These packets are then sent individually across the Internet and reassembled in serial order at the information's destination and converted back into voice. Voice is transferred much faster as the data is broken into very minute parts; and there is no danger of data loss.

Another advantage is that since the data is compressed into tiny pockets the space used by a traditional phone for one call can be used to accommodate numerous calls, up to eight times more calls, without compromising on the voice reception quality.

IP Phone makes things easy which are impossible with traditional phones. Traditional phone has geographical constraints but IP Phone can be used anywhere in the world as long as you are connected to the Internet. All the call receiver needs is a regular phone; theres no need for an IP Phone or even Internet connection to receive the call.

Also, IP Phone can integrate with other Internet-based services such as video and text chatting, files exchange and can be used simultaneously with these services. It also lets you know whether other contacts are available to you on-line.

Major reasons for the growing popularity of IP phone is the flexibility and comfort it offers not to mention the extremely low costs. Only expenditure required is for installation of IP hardware and software and it is one-time expenditure. All the calls are considered absolutely free in the sense that the user pays only for the Internet services; no extra payment is required for the call. Long distance calls work out very cheap.

One disadvantage is that some types of IP Phones may not be able to penetrate certain firewalls. Also, IP Phone hardware, working on domestic power supply, requires the back up support of generator or UPS in case of power disruption; otherwise the connection is severed the moment power goes off.