This was really weird. I first heard about a plan to develop a $400 HD web camera first on stage from the Microsoft Corporate VP for Unified Communications, during his keynote. Gurdeep Singh announced that TANDBERG would deliver this product. So I arranged a call with the product marketing folks at TANDBERG to discuss the product features and understand the state of readiness.

In short, this was a typical Microsoft announcement – provocative and a year ahead of schedule.

Provocative:

High Definition and Web Camera (meaning USB-attached) in the same sentence.

• Microsoft and TANDBERG in the same sentence.
• Development has not begun in earnest, since the product is not due until 1H2009.
• Channel for the product is not yet certain. Will Microsoft resell it? or just define/share technologies for it?

Key questions to be answered in the coming months:

Exactly 'how High Definition is HD' will be the question for Microsoft?

There is no doubt PCs are poor multimedia processors. Otherwise the video industry would have used them. PCs are great general purpose computing platforms, or for text entry like word processing and spreadsheet operations, but lack the processing power to deliver sustained streaming flows of highly compressed data like MPEG-4 or other standard compression techniques. I will predict that Microsoft will announce its own technologies as they've done with the forward error correction as in their real-time voice algorithm for their OCS 2007 clients.

 What will be the tradeoffs necessary to reach the sales price target of $400?

Optics and image capture

Silicon  vs PC processing

Audio microphones/pickup and processing 

Channel means it has to hit a cost target of $200 

It will be a compelling price point, if they can get there, but still no guarantee that it will kindle the rapid development of the enterprise desktop HD video unit market. Note that it's not clear to me that the quality of the desktop video experience is the performance variable that the industry needs to drive. 

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