A phone that converts audio/voice to a digital signal/packets to send over the Internet. Instead of connecting to an analog phone line, it connects to the Internet via an Ethernet cable or wirelessly.
IP Phone (Wikipedia)
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A VoIP phone or IP phone uses voice over IP technologies for placing and transmitting telephone calls over an IP network, such as the Internet, instead of the traditional public switched telephone network (PSTN).
Digital IP-based telephone service uses control protocols such as the Session Initiation Protocol (SIP), Skinny Client Control Protocol (SCCP) or various other proprietary protocols.