INTEL DIALING INTO VIDEOCONFERENCING

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The merger of the PC and phone may be ringing true.

Recent moves by Intel Corp. set the stage for a major market for video conferencing.

The price is right-or at least getting there fast. Intel first began selling a videoconferencing product for $2,495 in January 1994. But that price fell to $999 early this year for customers that bought through participating phone companies. Within a few years, Intel expects the price to turn a PC into a video phone to fall below $500.

"That's when the industry will explode," said Sandra Morris, assistant general manager in Intel's personal conferencing division. By the end of the century, if Intel gets its way, video conferencing will be as common a feature on a PC as a fax modem is today. The goal, Ms. Morris said, is to make the service as accessible as a dial tone.

Intel's products allow PC users to work simultaneously on a document while they see and talk to each other in a window on their screens.

In a key move this month, Intel formally agreed to make its technology compatible with an international telecommunications standard. That means PCs with Intel video features will be able to communicate with videoconferencing rooms, such as those currently installed at many companies and ad agencies, and some rival desktop video services.

Intel last week also announced a videoconferencing deal with AT&T Corp. and Lotus Development Corp. The alliance aims to make Intel's video conferencing, known as ProShare Personal Conferencing, compatible with AT&T telephone networks and Lotus Notes, the software marketer's popular data-sharing software.

Marketing hardware add-ons and software to turn PCs into communications devices is a small but growing area for Intel, the dominant supplier of computer chips. The communications products are a logical extension: They work best with Intel's fastest chips, boosting chip sales as PC users trade up to take advantage of the new videoconferencing features.

In the battle to dominate the field of PC video conferencing, Intel is competing against such players as AT&T, IBM Corp. and PictureTel Corp., a big force in videoconferencing rooms.

In chips, Intel has succeeded by getting leading PC marketers to adopt its standard, moving aggressively to drive down chip prices and marketing the Intel brand to PC users.

The video strategy is similar: Intel has signed deals with AT&T, Sprint, all but two of the Baby Bells and some leading international phone companies to resell the products.

Ms. Morris, meanwhile, vows Intel will lead the market in price cutting. "We're the lowest cost today," she said. "I think we will be the lowest cost moving forward."

Intel has done a few ads, and Intel and AT&T are working on a broader joint ad effort. Intel's agency is Dahlin Smith White, Salt Lake City.

Major ad campaigns aren't yet in the offing, though Intel has a history of advertising to create demand for new technology.

Intel's video conferencing products must plug into a local area network or special phone lines, so the company initially is focusing on business. But several modem marketers, including U.S. Robotics, are developing PC modems that can carry data and voice, opening up the home market.

Ms. Morris foresees broad consumer uses eventually for the Intel technology, allowing online services, for example, to offer both data and audio.

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