8x8 1998 Annual Report Download - page 9

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with the use of the optional wireless keyboard. The VC50 and VC55 Modular Videophones were both introduced in September 1997.
- VC105 Set-top Videophone. The VC105 Set-top Videophone is a successor to the Company's initial VideoCommunicator product, the
VC100, which was first sold in February 1997. While the VC105 model does require the use of a television as a display, it contains a built-in
digital video camera. Thus, it is a simple to install and use videophone, targeted primarily for home and small-business video communication
use.
- VC150 Desktop Videophone. The VC150 Desktop Videophone, which the Company first shipped in March 1998, contains a built-in digital
camera and a built-in four-inch LCD display. As a result, it merely requires connection to a touch-tone telephone. Thus, it is suited for desktop
or countertop use in a home or business environment.
The Company offers a number of accessories for use with its ViaTV videophones, including wireless keyboards and cameras for use with the
VC50 and VC55 models and an international travel kit for use with the ViaTV products. Currently, the Company is developing additional
accessories for its ViaTV products, including a full-duplex speakerphone.*
The Company plans to extend its VideoCommunicator product line in the future by developing products in new form factors and products that
are designed to comply with emerging video telephony standards.* The Company further intends to differentiate its products by adding features
and providing further picture and audio quality enhancements.* See "Research and Development."
The Company is dependent on continual and successful development and introduction of new products. See "Factors That May Affect Future
Results -- Rapid Technological Change; Dependence on New Product Introduction" and "Factors That May Affect Future Results --
Compliance with Regulations and Industry Standards."
Video Communication Semiconductors
The Company's video communication semiconductors are based on the Company's proprietary architecture. This architecture combines, on a
single chip, a custom RISC microprocessor, a high performance DSP core, specialized video processing circuitry, static random access memory
and proprietary software, which together perform the core processing functions required by video communication and other digital video
applications.
* This statement is a forward looking statement reflecting current expectations. There can be no assurance that the Company's actual future
performance will meet the Company's current expectations. See "Manufacturing" commencing on page 10, "Competition" on page 13 and
"Factors That May Affect Future Results" commencing on page 14 for a discussion of certain factors that could affect future performance.
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