Cisco Systems Inc, the world's largest player in data and voice Internet communications, will expand into video and mobile Web networks with the launch of its videoconferencing platform TelePresence yesterday.

 

"This is about the next wave of productivity," said John Chambers, president and CEO of Cisco, speaking through TelePresence yesterday from the company's headquarters in San Jose, California.

 

He said Cisco aims to grow TelePresence into a US$1 billion business in about three years.

 

Cisco has advanced technologies and new businesses capable of generating revenue of over US$1 billion in five to seven years that now account for 22 percent of its revenue. But Chambers said TelePresence could achieve these figures in a shorter period of time as it is the "most exciting thing" he has seen during his three decades in the industry.

 

TelePresence is an Internet protocol-based meeting system the first to meet the international high definition standard of 1080P picture quality.

 

The two initial versions, TelePresence 1000 and 3000, allow two people or 12 people to talk into a 65-inch plasma display and are sold at US$79,000 and US$299,000.

 

Initially the products will mainly target large enterprises, government organizations and healthcare institutions.

 

Chambers said the system allows people to work, live or play together face-to-face although they may be thousands of kilometers away.

 

Cisco estimates TelePresence will bring the firm a saving of up to US$100 million, or 20 percent of its travel expenses, every year, while the cost to install the system is about US$50 million.

 

Thomas Lam, president of Cisco Systems (China), said TelePresence is a platform that can run applications such as distance learning, medical care and security.

 

Cisco will begin delivering the new products to customers in December and has signed 24 partners to help install the systems.

 

Telecom operators AT&T and Verizon Communications in the United States will help promote TelePresence, while Telstra is also expected to join as the first operator in Asia.

 

Lam said the firm is also in talks with several Chinese operators, although some of them have their own video-conferencing services. "Their challenge is how to raise the quality of their services and provide their customers with what they want," said Lam. "These are the areas that we can help them."

 

TelePresence users will pay an estimated US$3,000 to US$5,000 a month for broadband, adding to revenue and efficient usage of operators' bandwidth.

 

Teliris Ltd, a New York-based videoconferencing firm, said in a statement late on Monday that the Cisco products are first-generation and are limited in their capacity to accommodate more than two locations and provide good eye contact.

 

HP launched a similar product, Halo, in December last year at US$500,000 for a single unit.

 

Pricing may also pose a challenge for Cisco; businesses will have to fork out US$299,000 for the equipment and a monthly fee of US$5,000.

 

But Chambers said prices would continue to fall as uptake increased.

 

"If we believe in Moore's Law, the price will be just one-tenth of the listed price in five years," he said.

 

(China Daily October 25, 2006)