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3
any phone in the world, whether that phone is an IP phone or a regular PSTN phone on the PSTN network. 8x8
utilizes IP communication endpoints which, when used in conjunction with the Packet8 network software, enable
plug and play installation and a regular dialtone user interface. The Packet8 service also uses web-based
technologies to enable account setup, account management, billing and customer support. The Company has
developed all of the underlying technologies of the Packet8 service, except for the trunking PSTN gateways (that are
used to terminate IP calls on the PSTN network). Packet8 works with industry-standard PSTN gateways to
terminate these calls.
CONSUMER SYSTEMS -- 8x8 is currently reselling private-branded telephone IP terminal adapters, which allow a
regular analog telephone to be connected to an IP network, and analog and IP videophones, all of which are
manufactured by several of Netergy's OEM semiconductor customers. These devices incorporate certain unique
software modifications to the protocol and application code that enable them to take advantage of 8x8’s Packet8 IP
services platform. The original designs of these devices are based on some of Netergy's semiconductor reference
designs.
Products
PACKET8 IP TELEPHONE SERVICE -- 8x8’s Packet8 telephone service was introduced in November 2002.
Customers enter into a service agreement with 8x8, and select a service plan based on their anticipated use of the
service. Service plans provide various minutes of usage, up to unlimited, for calls in North America and Canada
that are made to non-Packet8 customers. Subscribers are charged at a per-minute rate for international calls, and,
depending on the level of plan selected, may be charged for calls to the PSTN if they exceed the minutes allowed
under their plan. Depending on the service plan selected, 8x8 will either sell or provide at no cost to the user an 8x8
Desktop Terminal Adapter model DTA310 or Desktop Videophone model DV325 to use with the Packet8 service.
Each subscriber is assigned a telephone number in any of the more than 1,500 United States ratecenters currently
offered by the service. All Packet8 customers receive access to a variety of telephone features, including voice mail,
caller ID, call forwarding, online account management and billing (including real-time access to current bills),
virtual phone lines, international call blocking and caller ID blocking.
DTA310 DESKTOP TERMINAL ADAPTER -- 8x8’s DTA310 product is a telephone handset-to-Ethernet adapter
that interfaces regular analog phones with IP-based telephony networks. The DTA-310 is installed at the
subscriber’s 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 Session Initiation Protocol, or SIP.
DV325 DESKTOP SIP IP VIDEOPHONE -- 8x8’s DV325 product is an IP videophone that contains all of the
voice features of a regular Packet8 account. In addition, when a Packet8 subscriber with a DV325 calls another
Packet8 subscriber with a DV325, 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 DV325 videophone is designed to be compatible with other SIP protocol devices. 8x8
began trials of the product in April 2003.
DV324 DESKTOP VIDEOPHONE -- 8x8's DV324 product is a videophone with an integrated display and camera
that is compatible with the H.324 standard, and therefore works over standard analog phone lines. The videophone
can also be used to make a normal audio PSTN call. Controls on the videophone and the on-screen menu system
enable the user to adjust the quality of the video that is sent and received, electronically pan/tilt/zoom the near-end
and far-end cameras, take a high-resolution snapshot image, and turn on privacy mode to block outgoing video. The
phone supports two sets of audio/video inputs (for connecting external cameras, camcorders or digital cameras) and
one audio/video output port (for connecting an external TV or other display device) and supports caller-ID, auto-
answer (so the phone can be used as a monitoring device), and 10 configurable speed-dial numbers.
Customers
8x8 sells and markets the Packet8 service to end users through its web site and third party resellers of the service. In
addition, 8x8 is marketing the Packet8 service offering to service providers and cable television 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. The DV324 Desktop Videophone is sold direct