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Polycom CEO sees videconferencing on handhelds

According to industry experts, videoconferencing wireless handhelds could be widely available soon, and the technology could become more popular than voice alone for communicating with friends and co-workers.

That's also the prediction of Robert Hagerty, CEO of Polycom Inc., who has ushered the company through more than a decade of growth and acquisitions and put it at the center of the videoconferencing universe recently populated by big players such as Cisco Systems Inc.

Polycom, in Pleasanton, Calif., saw its 2008 revenues grow by 15% over the prior year, hitting a record US$1.1 billion, the company reported Jan. 21. Earlier in January, it also announced 150 layoffs out of its 2,600 workers to reduce costs as the company faces softness in its voice communications business. Traditional Polycom voice-conferencing products dropped to 33% of revenues in the fourth quarter from 37% in the same period of 2007, while video products bumped up to 67% from 63% a year earlier.

Hagerty sees his company's videoconferencing offerings as covering all bases, ranging from high-end telepresence systems with price tags of nearly $200,000 to those that cost a few thousand dollars. Today, Polycom announced a full-featured videoconferencing system for $4,000, the QDX 6000, with DVD-quality video.

In an interview, Hagerty, who has been Polycom's CEO since July 1998, discussed how videoconferencing technology has improved, its future for handhelds and its value as an expense-buster for companies that want to reduce travel costs in a battered economy.

Polycom has just had a record year of revenues. Why has videoconferencing come so far now when it was supposed to be the big thing several years ago? We have a great value proposition with video communications and it has taken a long time in coming. Originally, we were hobbled by a telephony infrastructure than ran on ISDN, but now it is on Internet Protocol. You can't believe how incredibly good the video quality is today. We at Polycom offer anything from desktop to PC to video that runs on phones to telepresence, all seamlessly built and high definition. It's spooky good video. You could take a penny and show Lincoln as he sits in the Lincoln Memorial on the back. That's how good it is. The integration with other phone and desktop communications has also leapfrogged.

But why so long? Wasn't there supposed to be this interest in the mid-1990s? We were one of the first to commercialize IP video in 1998, which didn't get a lot of play because networks were built for e-mail and not built for real-time communications. They were best-effort kinds of networks. But five years ago, we started seeing quality of service, meaning some data should be best effort and some should be on-time, and the technology worked well. So a leap happened.

Another breakthrough in technology was with high-definition video. It's such an incredible experience. People who've used this technology will walk up to each other and say, “It's so great to meet you in person, only on video, I didn't realize you were so tall.”

Is the value proposition of videoconferencing to reduce travel costs working? At Polycom, we have video for anybody who wants it, and that's up to 2,000 people in our work force. The value proposition is there, our travel budgets are less and we're not spewing the carbon anywhere near others on planes. The productivity level is much higher. There's opportunity not to be on a plane, or out driving, or in a cab. I can meet eight to 10 customers a day on videoconference and I have great meetings in high definition, face to face.

In addition to your duties at Polycom, you are on the board of Palm Inc. , a maker of handhelds and soon the new Pre . Does that mean you are helping them put video on their handhelds, perhaps? There are no partnerships implied with Palm. It's just the kind of technology I've advocated over my career and a good natural fit.

But more importantly, when are we going to see videoconferencing on wireless handhelds? We have videoconferencing solutions working over 3G networks with Ericsson in Italy running on the Palm. It's live TV, a live videoconferencing hook through our enterprise network and through 3G and into the backbone which connects a person to the office, so they can talk on a handheld. It looks great, but it's not high definition. You can get high definition videoconferencing on a PC. It easily downloads. We're doing it over Wi-Fi, too, so people sitting in airports can be on video conference calls with their laptops while they are waiting. That's live videoconferencing in high def.

It is good motion quality, at 30 frames a second? It's a full 30 frames a second, depending on the network. That's TV quality.

What will be the impact of videoconferencing on handhelds? Are you preparing for that? As videoconferencing migrates from a niche technology to the mainstream in the enterprise, you'll want videoconferencing for everyone, everywhere. It's an important solution and, of course, you will want it everywhere and on what you want to connect. Sure it's a huge thing. It's part of a wave that's starting to crest and affecting everyone.

Will we see a videoconferencing or video chat wristwatch, like the one LG Electronics Inc. showed at International CES recently? A wristwatch is probably the wrong form factor. That's less important than that people at work, whether at a home office or a work environment, will want to be able to connect to the rest of the organization.

As we see bigger developments in 3G networks, videoconferencing will be ubiquitous. Everyone will do it on handhelds. To be provocative, I'd say voice-only will be a rarity on a wireless handheld and videoconferencing will be the norm, sometime in the not-too-distant future.

I can see some drawbacks to that. The handheld does have the issue that holding it with a hand means it's not a steady camera image. The image needs to be higher than most people working on a handheld provide, since you'll be looking up somebody's nose if you aren't careful. We've developed video products for this and the camera angle is important. The early videophones generally had the screens too low so the camera looked up your nose. Also the video can be a little like the video from the Blair Witch Project , with the moving images, with the handheld moving up to the head, to the eye. You'll even get nosehair to nosehair.

So your researchers are looking into this? Yes, we have 600 people, nearly one third of the company, in research and development, and some are busy researching and building gateways to the handheld. We never make the phones, but they will require lots of processing power for video. As the networks get more bandwidth, any of the new smartphones will work, the Palm being the best of course.

There are several major companies offering videoconferencing products, some of the telepresence kind, including Cisco Systems Inc. How are you distinguishing yourselves from them? The industry is moving faster and faster, yes. We want to create a very immersive experience, the most immersive in the world with telepresence. We want you to feel like you are in the room with the other person. We want to push the envelope towards bigger and more natural. We have stereo audio and beautiful pictures. We're pushing for something bigger, something beyond high definition.

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