Polycom Retools Telepresence Product LinePolycom Retools Telepresence Product Line

High quality, high definition video has become common in the home and has been making its way into the business sector. A number of vendors are trying to deliver telepresence systems, which offer higher quality video connections than traditional video conferencing systems. Competition is fierce in this emerging market segment, and one vendor recently enhanced its portfolio.With more than 1.5 million systems installed, Polycom has been one of the leaders in the video conferencing space. Recently, the company made three announcements to maintain its market position. The first centered on improvements to the quality of the video supported by its systems, the second focused on easing the telepresence management chores, and last was additional agreements with third parties to help sell its systems.

Video conferencing capabilities are gaining attention for a couple of reasons. A growing number of small and medium businesses are using them to reduce their travel requirements and improve productivity. As a result, the market has been growing, and Polycom has been able to take advantage of that trend. For the nine months that ended on Sept. 30, net revenues were $806.3 million, compared from $666.6 million for the first nine months of 2007 and net income was $50.0 million compared to $40.1 million in the same period.

However, the high growth and increasing importance of video conferencing has attracted new competitors. Large vendors, such as Cisco and HP, have been pushing into this marketplace. In response, Polycom is trying to deliver high quality telepresence systems at a relatively low cost (about $17,000) and pushing its products through resellers, who often serve small and medium businesses. In the end, the competition will benefit these businesses because it will lower pricing and increasing functionality.