Communications: Video rivals see the big picture: AT&T and Intel are going to war for customers in the new technology of visual computer networking

THE NEXT few weeks will bring an intense battle to sell business a communications product that it is not yet aware it needs.

Electronics makers are hoping that, as with fax machines and mobile phones, availability will unleash massive demand.

The idea is simple, and has been made possible by recent advances in a range of different technologies. It involves mounting video cameras on top of personal computers, linking them with telephone lines, and equipping them with networking software that allows two computer users simultaneously to view and work on the same spreadsheet, document or slide presentation.

People thousands of miles apart can then work together face-to-face on a joint project - or just see each other while they have a business conversation. Manufacturers of add-on kits for personal computers hope that the concept will prove irresistible.

AT & T Global Information Systems - the company's former computer and cashpoint machine subsidiary, NCR - and the semiconductor giant Intel both launch industry-approved products in the coming weeks.

The battle between them is likely to be viciously fought. AT & T seems to have the edge in the race for British approval, and is the first to announce firm UK prices. Its kit, comprising video camera, loudspeaker, microphone and several circuit boards that go inside the PC, will cost pounds 3,500.

Intel's kit appears to be similar, but will be substantially cheaper, claims Nigel Grierson, the company's European marketing director - perhaps by as much as half.

AT & T counters that its product has a much higher picture resolution, is much closer to being 'real-time' video (as opposed to closely separated 'snapshots') - and conforms to the video conferencing industry standard. It will thus talk to other manufacturers' products as well as to standard video conferencing equipment. Intel's product, it claims, will talk only to another Intel device.

Intel concedes the point, but says it has set up a consortium to develop a new standard, encompassing future technological developments, such as video-phones. 'Our product's video processing capability is built into the hardware, not the software,' AT & T's Simon Goodwin says. 'It doesn't slow down or get fuzzy if there's a lot of background network activity.'

Either way, the equipment is expensive in comparison with the personal computer to which it is fitted - priced, typically, at under pounds 1,000.

So will businesses go for it? In order to take off, the concept must clear two hurdles: acceptance of the technology by users, and a large enough body of business people who need to work together on a computer application or see each other while they talk. Having the capability is not the same as needing it.

Both AT & T and Intel have adopted a scattergun approach to describing the product and its benefits - on the basis, presumably, that at least something ought to strike a chord with potential purchasers. AT & T favours 'collaborative working', or 'desktop video conferencing'. Intel goes for 'personal conferencing' or 'data conferencing'.

Both companies emphasise the human aspect of communication: the perceived impersonal nature of electronic mail has been blamed for the relatively limited inroads it has made into the fax and voice communication markets. By contrast, the marketing messages stress, video pictures can transmit facial expressions and body language.

Some potential buyers seem to have been identified. AT & T's Simon Goodwin cites the accounting departments of multinational companies, which need to incorporate subsidiaries' accounts and forecasts into their own overall figures.

Video conferencing is much cheaper than sending people on overseas business trips, he points out. This argument is echoed by Andy Grove, Intel's chairman. 'One trip saved and you've paid for the cost of the equipment,' he says.

On a visit to London last autumn, Dr Grove made clear the extent to which video conferencing products were central to the company's plans.

Real-time compression of video pictures into digital telephone line signals demands powerful electronic chips in the computer itself and on the video processing add-on boards.

Intel is the world's largest chip-maker. It has also developed its own 'Indeo' standard, hoping to profit from computer-based video processing in the same way that Microsoft has from computer operating systems.

But other big players in the personal computer industry, notably IBM, have been unseated by rivals with better technology.

Intel has also used its heavy financial firepower to beat off challengers for its chip business. Its results for 1993, released last month, showed net income was up 115 per cent, to dollars 2.295bn on sales of dollars 8.78bn.

In the forthcoming battle with AT & T for the desktop data conferencing market, however, Intel is taking on a company nearly eight times its size.

(Photograph omitted)