Videophone calling gets cheaper

Avaya and camera maker Polycom will unveil on Monday an Internet videophone product for businesses, adding to a growing line-up of affordable, easy-to-use gear of a kind once possible only in newspaper comics.

Avaya will sell Polycom's ViaVideo II video camera for PCs, packaged with an Avaya softphone. The combo is designed to let people make video or phone calls by dialling someone's number from an IM-like window on a PC desktop. If the recipient's setup is also video-enabled, the call goes through as video. If not, the call automatically switches to voice only.

At $429 for the phone and software, the Polycom-Avaya endeavour highlights the plummeting price of videophones, and how they're becoming much easier to set up and use. Just a half decade ago, videoconferencing systems were $40,000, came with a 30-plus-inch screen that required an IT staffer to set up and operate, and used traditional phone networks. Nowadays, sub-$400 videophones, and unlimited video calling for $30 a month, is the norm, and the gear plugs into most laptops or routers.

Along with Avaya, Net-phone provider Packet8 sells a videophone that plugs into most routers for $360 if purchased with a Packet8 video and broadband telephone calling plan. Do-it-yourselfers can find cheaper videophones by searching eBay, where $200 was the highest bid on a pair of Vialta Beamer BM-80 videophones a day before auction's end.

Who now uses videophones, and the accompanying tools, to have any number of people collaborate on, say, the design of a PowerPoint presentation? Not a lot of people yet, according to industry experts. By year's end, revenue from sales of video-calling gear will be little more than $40m, though that adds up to a 23 percent annual increase from last year, according to analysts Point Topic. Most videophones are used by hobbyists, or by businesses paring travel expenses by using videoconferences. A number of real estate, insurance and financial companies also use them, according to Avaya senior product manager Greg Brophy.

But plummeting prices for videophone equipment, and the spread of high-speed Net connections to more offices and homes, will lead to a billion-dollar market by 2008, believes analyst Wainhouse Research. Avaya intends to push the price tag down even further, to about $200 for the combined software/hardware package, by next year. That'll "really get this market going", Brophy said.