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Cisco makes its videoconferencing call
A billion-dollar business in the making?

By Reuters

Published: Monday 23 October 2006

Network equipment maker Cisco Systems on Sunday unveiled a high-definition videoconferencing system it says can grow into a billion-dollar business in five to seven years.

Named TelePresence, the product is the latest move by Cisco to expand from its traditional business of network routers and switches into video - a strategy it launched with the February acquisition of cable set-top box maker Scientific Atlanta.

A few analysts who were given a demonstration said TelePresence is likely to compete with HP's Halo Collaboration Studio and other high-end videoconferencing products by specialist technology companies such as Polycom and Teliris.

It will be available from December in two versions initially. The basic TelePresence 1000 model, designed for one-on-one meetings, is priced at $79,000 per station.

TelePresence 3000, for larger meetings, is installed in the form of a small conference room with three high-definition screens on which participants are displayed life-size. It is listed at $299,000 per station.

Cisco did not give sales targets but Marthin De Beer, vice president of its emerging markets technology group, said it would take a few years for the product to turn profitable.

He said: "We think it could be profitable in two to three years. We think it has potential to become a billion-dollar business in five to seven years."

Cisco chief development officer Charles Giancarlo said TelePresence's high-quality screens, as well as speakers and cameras positioned to help users feel like they are in the same room, may persuade companies that have so far shunned videoconferencing products.

Cisco chief executive John Chambers recently told his staff to cut the company's travel budget by 20 per cent next year with the help of TelePresence.

The company said it expects demand for TelePresence to come from a growing number of international companies with offices in places such as Bangalore and Shanghai.