8x8 2005 Annual Report Download - page 9

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6
DESKTOP TERMINAL ADAPTER
Our desktop terminal adapter, or DTA, product line is a set of telephone handset-to-Ethernet adapters that interface
regular analog phones with IP-based telephony networks. The DTA is installed by the subscriber at their premises
and supports a single voice port with its own direct dial phone number. This adapter runs a variety of
communication and network protocols, including SIP.
DESKTOP IP VIDEOPHONE
Our desktop videophone product, the DV326, is an IP videophone that contains all of the voice features of a regular
Packet8 service. In addition, when a Packet8 videophone subscriber calls another Packet8 videophone subscriber,
the videophones connect with instant-on high-speed video sent over the Internet. The videophones can be
configured by the user to use a maximum total data bandwidth between 84 kilobits per second and 640 kilobits per
second. The video quality of the call varies with the data bandwidth selected and other network conditions. The
Packet8 videophone is designed to be compatible with other SIP protocol devices.
PACKET8 ENABLED HANDSETS
In March 2005, Uniden America Corporation introduced a fully integrated, service-ready whole house VoIP phone
system, the Uniden UIP1868. The Packet8-enabled UIP1868 is a 5.8GHz digital expandable corded/cordless phone
that is expandable with up to ten handsets, deploying VoIP capability to each handset using a single high-speed
Internet connection. Incorporating 8x8’s Internet telephony software, the UIP1868 offers plug-and-play access to
Packet8’s feature-rich broadband telephone service, and includes a built-in 1-port router. The UIP1868 also
includes one phone port to interface external analog phone devices, such as an answering machine or facsimile
machine, to the Packet8-enabled base station.
Sales, Marketing and Promotional Activities
We currently sell and market our Packet8 and Packet8 Virtual Office services to end users through our direct sales
force, website, retail channels, online channels, network marketing firms and third party resellers. We launched the
retail channel in fiscal 2005 and entered into arrangements with numerous brick and mortar retailers, such as
CompUSA, Fry’s and J&R Music World, and on-line retailers including Amazon.com and TigerDirect. During
fiscal 2005, we developed a network marketing channel and entered into agreements with 5Linx, Cognigen, Escape
International and TJF Associates (dba Trapeze Communications), among others. These network marketing firms
have networks of agents who resell the service in exchange for payment of bounties and commissions by us.
We are marketing the wholesale voice and video service offering to Internet service providers, cable television
companies and digital subscriber line, or DSL, providers. Packet8 is offered to these third parties through reseller
agreements, hosted and prepaid service agreements or OEM technology license agreements.
We offer individuals and businesses the opportunity to become resellers of our Packet8 services through our affiliate
and reseller programs. Resellers are able to purchase bulk Packet8 accounts and hardware at reseller specific rates
and they are then able to resell these accounts to private individuals under the Packet8 brand.
Competition
Competitors for the Packet8 service include AT&T Callvantage, iConnectHere, Lingo, Net2Phone, Voicepulse and
Vonage, as well as cable television companies, such as Cablevision, Cox and Time Warner, incumbent telephone
carriers, such as AT&T, SBC and Verizon and other providers of traditional and legacy telephone service. Our
videophone service competes with other providers of videophone services and videoconferencing systems, including
Polycom, Sony, Tandberg, Worldgate and various software offerings that implement videophone functionality on a
personal computer.
Operations
We have a centrally managed platform consisting of data management, monitoring, control and billing systems,
which support all of our products and services. We have invested substantial resources to develop and implement
our real-time call management information system. Key elements of this system include: customer provisioning,