Tuesday, October 9, 2012

Polycom Inc (NASDAQ:PLCM) Ventures into a New Territory in the Conferencing Market

Polycom Inc(NASDAQ:PLCM) was initially a manufacturer of speakerphones, using which, one could engage in audio conferencing. However, it expanded its offering to videoconferencing as well, by providing equipment like displays, cameras and specialized servers. The company has been trying to close the gap from being a hardware company to a software firm for sometime.

The rise for players like Polycom and Cisco Systems was smooth due to the expanding global reach of businesses and the high cost of travel. However, other factors such as easy availability of video communications systems such as PCs with webcams, tablets, and smartphones, which are usually free or low-cost, have become a cause for concern.

The complex problem of telephone networks being unable to converse with each other has given rise to the term – interoperability, which requires a bridge between two systems. To achieve the purpose, Polycom has announced its RealPresence CloudAXIS Suite. The technology will make use by accessing information from the user bases of the systems. Users will be provided with a link to join a video conference via a common Web browser instead of a software.

Apple’s FaceTime, which allows users of iPhones and iPads to make video calls to each other, has not yet collaborated with Polycom. But, CEO Andy Miller is optimistic that once Apple analyses the advantages of the “interoperability” provided by Polycom, they will join hands with them as well.

Polycom is also working towards incorporating videoconferencing standard called SVC–scalable video coding. SVC is used by the startup called Vidyo. According to Ira Weinstein, a senior analyst and partner of Wainhouse Research, which records data of the conferencing market, SVC has lowered the costs of per connection below $1,000 from the range of $2,000-$15,000 using older technologies. Weinstein also appreciates Polycom’s shift from hardware to software, which, she feels, will turn the company around.

Shares of PLCM were up 8.52% to $10.32 on Monday.

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