The hardware technology at the heart of the effort comes from Celvibe, an Israeli company that recently has been on a venture capital winning streak that netted the 50-employee start-up a total of $12 million.
Streaming video to handsets is among the applications being proposed for the next generation, or so-called "3G," phone systems that telecommunications carriers throughout the world are in the midst of launching. These new systems will allow cell phones to have Internet access at broadband speeds.
But the 3G marketplace has been rattled as of late. NTT DoCoMo was supposed to launch the world's first such 3G network in May. Instead, because of problems with the network, it will wait until October. Other carriers in Europe and Asia also announced delays.
Some remain optimistic that such sophisticated services can work on a cell phone.
"There is, generally speaking, a potential for this to be a mass market type of product," said Keith Waryas, IDC research manager for mobile e-business. "It will do quite well, but for the next few years, it will be quite (a small) niche."
John Marchioni, Celvibe's vice president of business development, refused to identify the carriers testing the service, but indicated they could include British Telecom, which has more than 5 million customers. Marchioni said that people "shouldn't be surprised," to see at least one European telephone service provider offer the service as soon as the end of this year.
There are other companies developing the same type of technology as Celvibe's, including PacketVideo, which has received more than $100 million in financing, plus recently won a patent for some of its hardware. PacketVideo offers video content through a portal. Celvibe is different because it says it can offer a way to access TV events as they are broadcast.
What is streamed to handhelds is up to the carriers. But Marchioni thinks one of the first kinds of content that could be offered are financial market updates, he said. He also envisions that video caught by traffic cameras posted on freeways and highways could be streamed to devices placed in cars, so drivers could see for themselves just how crowded the streets are.
Streaming video on phones and personal digital assistants continues to meet with mixed reactions from analysts. They are awed by the technology but say it is a few steps ahead of its time. Celvibe's claim that some carriers might begin offering the service by year's end still hasn't swayed many analysts.
IDC's Waryas doesn't expect the video itself to be of such high quality. Video viewed on personal computers with 56K modems are often blurry, and the audio doesn't track the video images. Most phone networks are even slower, which could cause even more problems, he said.
"Think about 56K connections to computers," Waryas said. "The video is still choppy on a broadband. Now imagine doing it on a 14.4K," which is the typical speed at which data can be sent to a phone.