SOURCE: Quantum Investor

November 30, 2006 15:29 ET

Video Conferencing -- Good Business for Investors

BALTIMORE, MD -- (MARKET WIRE) -- November 30, 2006 -- After years of uneven results, makers of business equipment and tools for conference rooms are now seeing double-digit growth over the last three years. Video conferencing is on an upswing as companies strive to meet customers' expectations for video conferencing that is as effective as meeting in person.

"Performance like this has prompted action from tech heavyweight Cisco Systems," says Steve Christ, editor of the tech market analysis newsletter Quantum Investor. In October the net giant unveiled the "Cisco Telepresence Meeting." It's an all-encompassing package with a new level of video quality so lifelike that its participants actually feel as though they are all sitting in the same room, though they may be thousands of miles apart.

"It is, in short, a videoconferencing experience that approaches the industry's hopes of the Holy Grail -- a conferencing experience that is actually little different from meeting in person," says Christ. "This marks the beginning of a new, but long-awaited, era in the industry."

Christ notes that this new system doesn't come cheap. "At around $300,000 per room and installation, the price of deployment involves some seriously deep pockets. On top of that, the system is so bandwidth-intensive it requires a 10-gigabits-per-second connection that itself carries a monthly charge of $5,000." Cisco will begin the rollout of the system in Q2 2007 and expects to have it installed in all of its 110 offices worldwide by July.

"While Cisco has built the Ferrari of the videoconferencing world, Polycom Inc. leads the industry overall with its more economical versions. Polycom targets small and midsized companies. Their products cost 'only' tens of thousands of dollars, allowing them to reach a wider audience."

"This business is certainly nothing new to Polycom," points out Christ. "They have been involved in it since its inception. After spending years investing in research and development to make their products higher in quality and easier to use, the company has created a desktop version that's moved the conference out of the conference room itself."

Christ reports that company officials say that it is as easy to use as the phone.

The rationale for videoconferencing is as strong as ever, and the new technologies that are starting to hit the marketplace may make it more of a reality. Christ predicts that "while Cisco goes after the higher-end market, Polycom should see its revenues increase as these mature technologies drive home to the market that the day of the videoconference has finally arrived."

Steve Christ is editor of the market analysis newsletter Quantum Investor. Quantum Investor is a free e-letter that provides analysis on future technology trends and profit opportunities in the tech stock sector.

To receive a free copy of Quantum Investor, click here:

Contact Information