Sat, May 17, 2003 - Page 11 News List

Videophone makers hoping to clean up

HOT LINK As businesses try to avoid face-to-face meetings due to SARS concerns, videoconferencing has grown in popularity, but analysts say the demand won't last

By Annabel Lue  /  STAFF REPORTER

Local videoconferencing equipment manufacturers may reap a windfall from the SARS crisis, as business people avoid face-to-face contact.

But telecom industry analysts say the upturn in the normally stagnant sector will be a short-term phenomenon, with demand fading after SARS is brought under control.

Leadtek Research Inc (麗臺科技), one of the nation's major videophone makers, has seen demand grow since the middle of last month.

"Inquiries for our videophones jumped nearly 60 percent in April [compared to the previous month]," said David Lin (林書豪), an executive at Leadtek, although he refused to disclose sales figures.

Video telephony offers audio-visual communications between or among end users. At each end, users need to have a videophone, a handset equipped with a camera and a monitor, to receive and display images.

Leadtek produced 30,000 videophones last year and boasts that figure will rise to 100,000 this year.

"SARS has turned our inventories into hot items," Lin added.

Another equipment maker also expressed optimism, saying SARS increased the public's acceptance of videoconferencing.

"Last month the number of clients purchasing our videoconferencing devices broke records," said Tseng Ming-sheng (曾明聖), a deputy manager at Russell Information System Co (儒碩科技).

He added that company sales last month jumped nearly 30 percent over the same period last year. He also refused to disclose sales figures.

Tseng said optimistically that demand would keep rising in the near future.

"Many companies now realize the importance of communication back-up plans," he said.

Market watchers, meanwhile, poured cold water on those long-term dreams, saying an uptick in revenue would be temporary.

"Videoconferencing can never fully replace face-to-face communications," said Nathan Lin (林宗賢), an analyst at SinoPac Securities Corp (建華證券).

"Thus the market's future development is limited," he added.

Another pundit said most companies willing to spend on videoconferencing equipment would make purchases by this month.

"Therefore, demand is expected to slow down after that," said Yen Ming-chi (顏銘志), an analyst at KGI Securities Corp (中信證券).

Still, videoconferencing-device makers are upbeat and plan to be high profile in the August's Taipei International Telecom Show.

"Many videophone makers and videoconferencing-service providers expressed strong interest in participating in this year's telecom show," said Penny Liu (劉仲容), a senior official at the Taipei Computer Association (台北電腦公會), the show's organizer.

More than 100 telecom companies have registered so far to set up 400 booths at the show.

Ever since SARS appeared here in late March, trade shows have seen a massive drop in attendance. The situation was worse this month and several shows such as Computex Taipei, Taipei Softex Show, Taipei International Food Show and Taipei International Packaging Industry show, scheduled to take place between this month and July, were canceled.

TCA stressed the Telecom Show, scheduled to run between August 23 to 26 at the Taipei World Trade Center, will proceed.

"We don't plan to call the show off unless SARS is still a threat in July," Liu said.

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