Videophones, Round 3: Finally as easy as picking up the phone?

One of the key mantras in the videoconferencing market always has been "it should as easy as picking up a phone." Some products, such as Polycom’s intuitive remote control—which was based on feedback from the gaming industry—meet the criteria; other products throughout the years have missed the ease-of-use mark entirely.

The mantra has also, from time to time, compelled product manufacturers to attempt to integrate videoconferencing into the venerable desktop phone. Dubbed the "videophone," these devices appear every few years in an attempt to merge phone and videoconferencing functionalities in one unit.

Videophones were first introduced by AT&T at the 1964 World’s Fair, meeting with great critical acclaim and public wonder but limited financial success. In the mid-1990s, the advent of ISDN allowed product manufacturers of ISDN videoconferencing systems the flexibility of shrinking room-sized systems into compact phone/videoconferencing units similar in size to today’s videophones. But the cost of compact, integrated, flat-panel screens pushed the price of the units into the thousands, and video quality was substandard due to the single ISDN limit (128Kbps) and compression algorithms that were optimized for the higher bitrates used in room videoconferencing systems. These units enjoyed brief success, with rollouts by major telephony service providers reaching similar "buzz levels" to current announcements (see this 1996 article for one example).

Vonage announced in December that it will begin to sell videophone service to its voice over IP customers, with a focus on small to medium business customers. The announcement, which also included mention of Vonage’s hardware partner, Viseon, received significant press attention and ushers in Round 3 of videophone convergence, with several other product manufacturers soon to follow suit.

These new videophones appear poised to address the technical issues that doomed videophones in the 1960s and 1990s: today’s units replace ISDN or POTS lines with IP transmission, feature SIP and H.323 support, incorporate new codecs such as H.264, and feature low-cost, high-resolution LCD screens. Yet a fundamental question has remained unanswered since 1964: do business customers want videophones and will they use them?

To get a better sense of how Round 3 companies will fare, three critical concerns need to be addressed: product design strategy, marketing strategy, and consumer behavior.

Product Design Strategy. The CES show in early January 2005 will see the unveiling of numerous videophone products, such as the Vonage/Viseon unit and WorldGate’s Ojo (based on a Motorola chipset, who is also an early Ojo customer). Based on information current as of this article, it appears Vonage made the right choice for a hardware partner, since Viseon had previously released a videophone product—the Visifone—in late 2003. According to Inside Digital Media, Viseon plans to release its new product for less than $300 (the Visifone was released at a $599 price point). To aid in product design, Viseon announced that it had engaged Bleck Design Group, a well-known firm that has designed ubiquitous products like the Polycom ViewStation and Dymo Label Printer. Bleck Design Group will perform both mechanical and functional design of the new Viseon videophone.

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