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Talk cheaper at Intel

But analysts say it will take more than discounts to invigorate the videoconferencing market.

Intel has announced a new business-quality desktop videoconferencing system at a price far below its previous offering, but analysts say it will take more than lower prices to invigorate the market.

The ProShare Video System 500 is priced at $799, a 33 percent drop over the previous product. It delivers up to 30 frames-per-second performance and is integrated with Microsoft's NetMeeting software.

The videoconferencing market is largely split right now between the haves and the haven't-much-interest, analysts said.

"If companies need it, they've got it," said Ed Buckingham, an analyst with International Data Corporation. "But if you don't need it, you're liable to sit on the sidelines and let this thing mature a little bit more," he said.

Meanwhile, "the home user is in a bind," Buckingham said. "Modem speeds are just not fast enough for high-quality video. There's not an awful lot to get excited about."

Prices on these systems will continue to drop, Buckingham said. The systems are getting faster and better, but the "significant hurdle" to increased use of videoconferencing is network infrastructure, he said.

The minimum system requirement for the ProShare Video System 500 is an Pentium II processor, 80MB of hard disk space, and Windows 95 or NT. A free upgrade for Windows 98 users will be available later this year, Intel said.

Intel's announcement follows the April introduction of a revamped workstation that combines videoconferencing with other features to help employees get more accomplished in meetings with distant colleagues.

The TeamStation System 4.0 is a conference room workstation that combines videoconferencing, Internet access, corporate network access, and PC applications in one system.

The system, which is targeted at large corporations, has a suggested retail price of $9,999.

Intel is an investor in CNET: The Computer Network.