Taiwan moves to answer call on videophones

The videophone market has called many but, so far, no one has answered.

Since AT&T displayed its prototype at the World Fair 33 years ago, the concept of a telephone with vision and sound has caught the imagination of consumers and producers alike.

Except when it came to forking out money for the product, which was no surprise, with prices until recently around US$1,500.

Proton Communications Technologies president Chen Yin-wu hopes to change that.

The firm, a subsidiary of one of Taiwan's largest television and monitor suppliers, is leading an assault on the videophone market.

It heads an alliance of 16 Taiwanese electronics companies - among them appliance-maker Sampo and monitor-supplier Lite-On - which believes it can combine its manufacturing and information technology marketing skills to turn the videophone into a consumer product.

Proton would make its first product in the first quarter of next year, priced between $800 and $1000, Mr Chen said.

He agrees this is a bit high for the consumer market, but he is confident prices will come down because the age of the videophone is here.

Why? Firstly, consumers would buy videophones because of the mix of price and quality, he said.

Until now, the price has been high, but picture quality has been average. Data compression - squeezing more video on the same amount of hardware - also is improving.

More bandwidth is on the way, even across the public phone network, and high-speed 56 kbps modems are just hitting the market.

Many phone companies, including Taiwan's Chunghwa, are working on asymmetric digital subscriber lines or similar technologies, which can boost bandwidth across phone lines by a thousand times or more.

Even integrated services digital networks are becoming widespread, not to mention the entry of cable modems which also offer broadband speeds.

'People in business are increasingly using video-conferencing at the office,' Mr Chen said.

'So there is a growing community of people accustomed to the video-phone.' What gives his group heart is the Internet.

'The video-phone is a multimedia device. It has video, audio and a communications module. It is a potential Net access platform,' he said.

Mr Chen's group believes that by souping up the phone with the Java programming language it can create a 'virtual machine' which will be able to browse the Web.

Its competition will come from Net PC-makers - firms such as Oracle and Acer that want to make stripped-down PCs for Net surfing at prices below $1,000.

Mr Chen said previous attempts to sell videophones were led by technology-driven phone companies.

The market is now being driven by computer giants such as Microsoft and Intel, which have built desktop conferencing devices.

'There is a lot of interest in the product, but [also] uncertainty at the size of the market at this stage.' What is missing is an international partner.

Mr Chen said he had talks with 'a lot of companies, but so far we don't have a solid deal'.