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Beaming in Grandma

2010-10-07 06:23:40

Oct 6th 2010, 18:53 by The Economist online

TECHNOLOGICAL prophets have forecast the triumph of video-calling ever since

1936, when Germany s Reichspost launched the first public videophone service.

But a flurry of announcements from technology companies suggests that its time

may at last be at hand. On October 6th Cisco unveiled a video-calling system

for the living room called ūmi telepresence (yes, really). The same day

Logitech launched a television set-top box that doubles as a videophone.

Microsoft s new Xbox game console, due in November, will offer

videoconferencing.

The market for professional video gear is also in flux. Skype, a service that

allows users to make calls from their personal computer (PC), is moving into

this territory. PCs from Hewlett-Packard will soon come with video software

from Vidyo, an American start-up. And in April Cisco bought Tandberg, another

maker of video gear, for $3.3 billion.

All this activity is a reaction to the growing popularity of video

communication. Video calls accounted for about 40% of the 95 billion minutes

that people spent on Skype in the first half of this year. Although Cisco has

sold only about 900 telepresence rooms so far, this is far from shabby,

considering that such systems cost up to $350,000 a pop and often entail

expensive network upgrades (with which the firm makes most of its money).

Vendors of lower-end systems, such as Polycom, are not doing badly either.

Better technology is only one reason for the uptake. Attitudes towards video

communications have also changed, says Scott Morrison of Gartner, a market

researcher. Having used it at home to let Grandma see the children on their

PCs, people now feel more comfortable trying video communication at work. Most

important, senior executives have warmed to the high-end telepresence systems

sold by Cisco and others, boosting the use of the technology further down the

corporate hierarchy.

Cisco and Logitech want to build on this momentum, particularly in the home.

Cisco s gear is the more daring because it is a dedicated video-calling system.

The package includes a camera and a console, which together cost $599. Users

also have to pay $25 a month for unlimited calls. And they need a

high-definition television set as well as a fast internet connection to get

good results.

Still a few glitches

Yet despite all the progress, video communication is probably still not ready

to take the world by storm. Most systems are not compatible: common technical

standards are years away, as is a common video phone book. And it is unclear

how quickly video-calling will spread. Gartner forecasts that the growth of

high-end telepresence systems will allow companies to keep more workers at

their desks, saving 2.1m airline journeys a year by 2012 and cutting car-rental

costs. But it is not clear that travelling salesmen, for example, will take to

the technology.

Another open question is whether customers will plump for dedicated video

communication systems over those that also serve other purposes, such as a PC

or a games console. Companies need both types: dedicated ones for important

meetings and PC-based ones for everyday communication. But will consumers spend

a few hundred dollars for an extra device? Then again, experts were equally

sceptical when Cisco launched its executive telepresence systems.

Whatever system they pick, consumers will come up with new ways to use it.

Already, some families host Skype dinners , with relatives calling in. Others

never hang up, thus turning a display in the kitchen into a window on somebody

else s home. Similarly, some firms have started to experiment with virtual

water-coolers , connecting their office kitchens by means of a permanent video

link. Whether this improves productivity or simply encourages long-distance

debates about football and The X-Factor remains unclear.