An IP phone uses Voice over IP technologies allowing telephone calls to be made over an IP network such as the internet instead of the ordinary PSTN system. Calls can traverse the Internet, or a private IP Network such as that of a company. The phones use control protocols such as Session Initiation Protocol, Skinny Client Control Protocol or one of various proprietary protocols such as that used by Skype. IP phones can be simple software-based Softphones or purpose-built hardware devices that appear much like an ordinary telephone or a cordless phone. There also exist the possibility to reuse ordinary PSTN phones as IP phones, with analog telephony adapters (ATA).
It may have many features an analog phone doesn't support, such as e-mail-like IDs for contacts that may be easier to remember than names or phone numbers.
The overall hardware may look like a telephone or mobile phone.
An IP phone has the following hardware components.
Speaker/ear phone and microphone
Key pad/touch pad to enter phone number and text (not used for ATAs).
Display hardware to feedback user input and show caller-id/messages (not used for ATAs).
General purpose processor (GPP) to process application messages.
A voice engine or a Digital signal processor to process RTP messages. Some IC manufacturers provides GPP and DSP in single chip.
ADC and DAC converters: To convert voice to digital data and vice versa.
Ethernet or wireless network hardware to send and receive messages on data network.
Power source might be a battery or DC source. Some IP phones receive electricity from Power over ethernet.
Common features of IP phones
Dialing using name/ID: This is different from dialing from your mobile call register as the user does not need to save a number to a sip phone.
Locally stored and network-based directories
Conference and multiparty call
Call transfer and call hold
Preserving user name/ number when choosing a different service provider (not widely supported).
Applications like weather report, Attendance in school and offices, Live news etc.