A softphone is a phone that allows you to talk using VoIP without necessarily having a physical phone set.
A softphone is a software application that permits you to make IP-based telephone calls from an Internet-connected computer. It doesn’t require any dedicated hardware, such as a phone or cable wire, but typically is used with a headset or a USB-connected phone. Using a softphone requires having a computer with a soundcard, an Internet connection and a subscription with a softphone service provider.
it is a piece of software, or part of a VoIP software, that acts as an interface allowing you to dial numbers and carry out other phone functions using a screen (that of your computer or PDA) and your mouse, keyboard or keypad.
Commonly, the interface resembles a phone with buttons representing the keys, which you press using the mouse to dial. An example is the Skype softphone.
For speaking and listening, a headset and microphone suffice. You can also use an IP phone or handset, if you have one.
Basic Softphone Features
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The simplest softphones feature a dialing pad, a display field, an accept-call button, and end-call button. Some basic softphones also offer speed dialing and an integrated address book.
Advanced Softphone Features
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Advanced softphone features include caller ID, three-way conferencing calls, anonymous call blocking, 411 directory assistance, area code selection, voice mail, callback, do not disturb and silent monitoring. It’s like using an analog phone receiver with an answering machine. Similar to conventional phones, you must pay an extra subscription fee to use many of these functions
High-end Softphone Features
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The best softphones can work alongside a webcam so that you can engage in a video chat with another softphone user. There’s also a voice-mail extension so callers can leave a message for a particular employee or extension. In addition, an auto attendant feature plays music for customers who are put on hold. And with the Find Me, Follow Me (FMFM) softphone feature, employees can move to different stations and still receive calls.
Landline-Capable Softphones
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Some softphones can dial landline telephones by using an advanced form of the Voice over Internet Protocol (VoIP). Using a softphone such as Skype, for instance, you can call someone from another state or country. Such calls still carry a premium, but the premiums are generally cheaper than the prices associated with conventional overseas phone calls.
Other Features
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Softphones come in many sizes and shapes and serve a variety of functions. They aren’t restricted to desktop computers anymore. Softphones can be used on laptops and even 3G- and 4G-connected cellphones. There is a softphone for everything, regardless of whether you want to just make simple PC-to-PC phone calls, start a conference call or even make a PC-to-landline phone call.
Ref: http://www.ehow.com/info_8340318_softphone-features.html