March 03, 2005
Videophones poised for take-off
NEW YORK — The videophone has been a long time coming. Predicted for years — oldsters may remember AT&T's 1964 World's Fair pavilion with its black-and-white videophone demo, while some Comdex vets may recall Lucent's pioneering circa-1996 AVP-III videoconferencing chip — practically every futuristic science fiction TV show since the 1960s "Jetsons" portrays people commonly communicating by videophone.
Unlike completely new technology arriving virtually unannounced — like MP3 players or cameras in cell phones — consumers have had plenty of time to ponder the videophone, and its implications.
Some people — mostly business users — are already using videophones. Since the mid-90s early adopters have been able to adapt Internet-connected PCs to function as videophones. Standalone videophone products have been available for many years, some working with ISDN telephone service (DSL's early 90's-era ancestor, developed specifically with videophones in mind), some with lowly dial-up service — give one to grandma, keep one at home and make videophone calls to each other. Packet8 has been marketing Internet-based videophones, along with service (starting at $19.95 per month), since 2004, and analog videophones, such as 8x8's ViaTV, have been available since the late 1990s.
Yes, videophone technology, in various formats and quality levels, has been around for a while, but videophone use has not become widespread. Yet.
Now, several converging factors are shaping up to enable videophones, over the next few years, to break out from being a niche, geek-oriented consumer phenomenon, and begin going mainstream. These factors include:
Cost:
Standalone videophone hardware may have been previously available, but prices are about to plunge, thanks to ever-cheaper LCD panels, and good ol' Moore's Law. Texas Instruments estimates the system bill of materials for its recently introduced Videophone reference design (see TI, Wintech Offer Videophone Development Kit) at $120, with the biggest chunks going to the processor (about $30-35) and the 5" LCD screen (about $20). This puts the retail price of consumer videophones in the $200 ballpark. As with cell phones, service provider subsidies may lower prices further.
Service Providers:
Vonage is rolling out IP-based videophone service, utilizing Viseon VisiFone videophones, this year. (Vonage is a VoIP provider with almost 400,000 customers and strong retail presence at stores such as RadioShack, Best Buy, Circuit City, and Staples.) NTT DoCoMo introduced videophone service in Japan last year, and both France Telecom and British Telecom have announced plans to offer it. True, you don't absolutely need such a service provider, the technically sophisticated user can do it themselves directly over the Internet (as with voice-only Internet telephony). But service providers offer several advantages: they can guarantee quality of service with minimum latency, they can provide compatibility between different protocols, and most important, they interconnect to the conventional telephone switched network. Service is expected to cost about $20 to $30 per month for unlimited videphone calls.
Compatibility:
Two IP communications protocols, H.323 and the newer SIP (Session Initiation Protocol), are used by videphones to establish, modify, and terminate multimedia calls. Two videophones calling each other directly — using IP addresses to establish the connection — must be set to the same protocol. (They must then also agree on the same audio and video codecs, of course.) But by routing the videophone call through a service provider, a host of compatibility issues can be dealt with automatically, including session protocols and proprietary standards. Initially, as these services roll out, incompatibilities may persist. But over time, videophones that can connect regardless of service provider are all but inevitable.
DSP Processor Power:
Many earlier, more expensive videophone designs were based on CPUs running Windows, or Linux, but manufacturing costs are being lowered by utilizing multimedia DSPs in new designs. "The (DSP) processor is doing twelve different things at the same time," said Pradeep Bardia, TI's Worldwide Marketing Manager for DSP Video Solutions, referring to the TI/Wintech videophone development platform, which is based on TI's DM643 digital media processor. Bardia points out that only very recently has it become possible to do a single-chip MPEG-4 encode/decode videophone design. "Seventy-five to ninety percent of processor time is being used," he said, "the headroom is only about ten percent."
Broadband Adoption:
Videophone service couldn't possibly become widespread until broadband adoption reached critical mass, which it now has. (Earlier attempts to provide videophone service using 56k analog modems were quite weak in both performance and marketplace acceptance.) By 2006, 50% of U.S. households will have broadband (see U.S. Lags In Broadband Adoption Despite Demand For VoIP, IP Video: Report.)
Compression Efficiency:
MPEG-4, aka H.264, uses about half the network bandwidth required by H.263 (a videoconferencing codec based on MPEG-2) videophones. With CIF (352 x288) resolution, the new breed of videophones run at 30 frames per second, just like regular TV in the U.S. Additionally, these phones have the smarts to prioritize sound over picture. The overall experience, as a result, is more pleasing than some earlier efforts using less efficient codecs. (By contrast, 8x8's dial-up DV324, successor to the ViaTV models, maxed out at 15 fps in 128 x 96 SQCIF, and got just a frame or two per second in CIF mode.)
Growth of IP Telephony:
Videophone service is a really an extension of voice-over Internet Protocol telephony (VoIP), which itself is relatively new, but growing. By the end of 2004 the U.S. had 1-million VoIP home lines, and 1.5 million IP-based PBX lines. But this nascent market is poised for explosion, due largely to cable television's entry: By 2010, some 11.5 million U.S. homes are expected to sign up for VoIP via cable-TV. The Yankee Group predicts VoIP in 17.5 million U.S. households by 2008. Since a videophone is only useful if it can connect to another videophone, VoIP adoption is essential to this product's success.
Yes, but do people want it?
Though poor technical performance of earlier generations of consumer videophones certainly accounts for a good deal of the ho-hum consumer interest until now, clearly there is a psychological factor at play as well. Most people this reporter spoke with informally had only lukewarm interest in videophones for personal use. Porn, and keeping grandparents connected, would appear to be the killer apps. Most people cited invasion of privacy as a primary reason they wouldn't want the bulk of their daily phone calls to be videophone calls — "Jane Jetson's morning hair problem." (In the classic cartoon show, Jane substituted a life-size still photo when she didn't have her make-up on. For a taste of what life with videophone is really like, see Videophone Etiquette: A Dozen Amusing Lessons on Packet8's web site. It's loaded with tips like, "Chomping on a slice of pizza or chewing a wad of Bazooka Joe bubble gum is not the most attractive way to present yourself via videophone. Please avoid dining during video calls.")
Regardless of concerns about home use, videophones have already gained a following for business use, including job interviews, and conference calls. The worldwide enterprise group videoconferencing equipment market is expected to grow from about $650 million in 2004 to $1.1 billion in 2008, according to Wainhouse Research. Simultaneously they predict that factory revenues for personal videoconferencing systems will grow from just $40 million in 2004 to $180 million in 2008 — 300% growth in four years.
A big chunk of this fast-growing videophone market will take place in China, Wainhouse says. Not just for manufacturing, but for consumption. "China is at the cutting edge of Visual IP Communications," their recent report, Videoconferencing Takes Hold In China, concludes. And cultural differences may make the privacy issue less prevalent in Asia.
Will videophones be the next big thing? Maybe not in the explosive way that iPods and cell phones and DVD have taken off. But with double digit growth expected for the next several years, and with readily available reference designs making it easy for manufacturers to quickly join the party, and with no major consumer electronics brand names dominating yet, the videophone market would seem to offer some tantalizing possibilities for newcomers.
