The economic slowdown has forced many companies to curb their expenditures, and this includes cutting down on business travel expenses. This seems to have opened up doors of opportunity for the $1.6 billion videoconferencing industry, according to a recent BusinessWeek report.

 

Reportedly in 1964, AT&T (News - Alert) introduced a prototype of the videophone. However, as the report says, “the technology promised the moon but delivered mainly jittery pictures and out-of-synch audio.”

 

The signs of recession have made companies look at telepresence technology to keep in touch with its global clientele and employees. The technology creates the “illusion of sitting in the same conference room” with people present in different locations around the world.

 

The report says that Cisco Systems (News - Alert), Polycom, and Hewlett-Packard are seeing strong interest in telepresence systems. Since May, Cisco's sales have reportedly doubled to more than 1,000 units. The company is expecting its sales to reach $1 billion by 2010.

 

“Telepresence is about putting your best salesman in front of your best customer in a matter of minutes,” said Marthin De Beer, head of Emerging Technologies Group at Cisco.

 

The report says that Cisco customers get specially furnished conference rooms. The room costs nearly $300,000, with high-end equipment fit for a TV-studio.

 

The start-up company LifeSize (News - Alert) Communications launched high-definition-quality video calls with business partners in Guatemala, Norway, and India. The company, according to the report, claims to provide a system similar to Cisco but at a lower price.

 

LifeSize combines its high-definition (HD) cameras with video processing to offer “sharp pictures” over Internet hardware for around $5,000. However, for full telepresence system, the company charges $40,000.

 

According to the report, nearly 4,000 customers ranging from giant Wal-Mart Stores to tiny Web venture FetchDog.com have purchased 15,000 systems.

 

Craig Malloy, CEO at LifeSize, said, “Telepresence is not just for the richest companies in the world.”

 

LifeSize believes that it may have to share the low-end of the market with the slashing of prices by companies such as Polycom (News - Alert). For some systems, Polycom has dropped its prices below $10,000, according to the report. Cisco has also started targeting this market.

 

Cisco has introduced a new scheme to use telepresence in many business and consumer settings. One of the examples of this setting is the giant LCD screen at the bank displaying mortgage rates and other data, and also allowing people to conference with mortgage broker at the click of a button.

 

Activision (News - Alert) (ATVI), the computer game maker, has placed 24 LifeSize systems in its offices in five countries. Thomas Fenady, director of IT at ATVI, says that this has allowed Activision to cut its travel budget by 20 percent and trim weeks off the game development cycle.