Lindows has launched PhoneGaim, Linux software that combines phone and voice with Instant Messaging. With PhoneGaim, a computer user can use a PC running the Linux-based Linspire operating system to dial and receive phone calls to and from any telephone, SIPphone, or PhoneGaim user. PhoneGaim combines session initiation protocol (SIP)-based VoIP capabilities and Gaim, instant messaging software that works with major IM services such as AIM, MSN, ICQ and Yahoo!

Once PhoneGaim is activated and a SIP number is assigned, a subscriber's IM buddy list will be updated with a phone icon. To initiate a call, the user clicks on the phone icon. Lindows also sells a SIP handset that connects to PC audio input/output ports. PhoneGaim service includes features such as voicemail to email transfers, conference calling, and online account management.

The software, and all calls to PhoneGaim and SIP users, are free. Calls placed through the public switched telephone network (PSTN) are billed at a per-minute rate. Lindows says that it hopes to provide a Windows-compatible version of PhoneGaim in the future