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Viseon’s VisiFone
product is the world’s first digital home telephone designed exclusively for
broadband phone service
Services
Business Services
(VSNI-OTC: BB)
Viseon Inc.
8445 Freeport Pkwy. 245
Irving TX 75063
Phone: 972-906-6300
John Harris
Chairman, President and CEO
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
June 16, 2005
BIO:
John Harris has been a director, Chief Executive Officer and President of the
Company since February 2001. From May until December 2000, Mr. Harris served as Chief
Executive Officer of Diversified Technologies Group, Inc., a company that provides
enhanced fax services. From October 1999 until May 2000, he was Chief Executive Officer of
CBQ, Inc., an e-business solutions provider. From March 1999 until joining CBQ, Inc., Mr.
Harris served as President of Paragon Innovations, Inc., an embedded device design firm.
From 1986 until 1998, he was President and CEO of CompuNet Support Systems, Inc. CompuNet
provided networking, systems integration and business building applications.
Company Profile:
Viseon has been developing broadband audio and video communication solutions since 1993
and completed its initial public offering in 1995. Thousands of Viseon corporate
videoconferencing systems have been sold around the globe under brands such as Philips.
Viseon has been granted 23 U.S. and international patents and has 50+ pending, all of
which pertain to video communication and applications for a consumer communication device.
The next generation VisiFone, launched at the
Consumer Electronics Show in Las Vegas in January of 2005, will revolutionize consumer
telephony in the U.S. and abroad. The new VisiFone has been designed to enhance VoIP
services from almost any VoIP carrier. Compelling features include digital WideBand
CD-quality audio, TV-quality two-way video telephony and onscreen feature management of
a carrier's VoIP service.
CEOCFO: Mr. Harris, what
originally attracted you to Viseon and how has it changed under your leadership?
Mr. Harris: “What attracted me was being involved in
video communications. That has been a challenge and it is a challenging field. Since I
joined Viseon in February of 2001, we have made some dramatic changes in exiting the
corporate video conferencing business where Viseon (formally RSI Systems) had some success
with a product that was sold under a couple of different brand names such as VITEL,
GETNER, and PHILLIPS. Since that time, we exited the corporate video conferencing business
and got into what could be a billion-dollar industry in the not-too-distant future as we
move into digital home telephones designed for the new, fast-growing broadband phone
services.”
CEOCFO: Will you tell us
more about your VisiFone?
Mr. Harris: “The VisiFone is the world’s first
digital home telephone designed exclusively for broadband phone service. That allows us to
offer a device that highlights the differences between broadband phone service and plain
telephone service. The device not only offers wideband audio, which is the difference
between seedy quality audio vs. old AM radio, but also offers video telephony. The
interactive video communications aspect of the product is another application that sets it
apart from anything else on the market.”
CEOCFO: If I am talking
to someone, they will see me and I will see them?
Mr. Harris: “That is right! You will see it in
television quality with crystal-clear sound. It is amazing, and we are excited about
bringing it to market.”
CEOCFO: Where are you in
the process?
Mr. Harris: “We are fast approaching deliveries to
carriers beginning the end of June. I suspect shortly thereafter, if these carriers
finalize the certification process on their networks, they will be in a position to offer
it to their customers.”
CEOCFO: To whom are you
selling your services?
Mr. Harris: “Our launch partner is Vonage, which we
announced an agreement with them late last year in developing a video telephony service
for their customers and Vonage is the leader in broadband phone services. The target
customer of Viseon is the broadband phone carrier and that is going to be Vonage, and the
cable MSOs that offer telephony services. We are targeting AT&T’s CALL VANTAGE;
it offers a broadband phone service, and Verizon offers a broadband phone service. We have
had conversations with every major broadband phone service provider here in the United
States as well as the majority of them globally. We expect to begin delivering products
for them to begin testing in the late June and early July (2005) timeframe.”
CEOCFO: Is there
equipment that the customer should have other than what they would have for the basic IP
service?
Mr. Harris: “Other than a broadband modem, there is no
other equipment, and the broadband modem normally comes with the high-speed access that
they are currently paying for to get to the internet. Everything comes self-contained in
the VisiFone.”
CEOCFO: What are people
getting through you that they are not getting elsewhere?
Mr. Harris: “Viseon Media is a wholly owned subsidiary
created to bring new exciting applications to the VisiFone. What I mean by that is for
instance, with Accuweather we are now able to offer the consumer 24/7 access to the
weather in their area when they want to know about it. That is something that you cannot
do with a regular telephone today. Today, anything you want to access on the internet, you
have to have a computer. What that means is that for folks that do not have a computer, do
not want a computer or do not want to fight over the computer they have with their
children, they do not have access to that information. What we have done with Viseon
Media, is we are creating relationships with not only content providers like Accuweather,
but also sponsors like VISA so we can bring this content that is customized for the
consumer, and only the content when they want it.
We expect to announce many other relationships with content providers as well as
advertisers or sponsors, to that content so that that content remains free to the
consumer. Another example is men and women leaving the house for work that want to see
traffic cameras as well as the current day’s weather forecast and maybe even some
business headlines or just local news headlines. They can pre-program all of that
information into the VisiFone and from 6:30-6:45, in that window of time, that information
is right there. As they are leaving, they can take a quick snapshot of what they are about
to drive into, what the weather is that day, so if they need an umbrella, they have one,
and see what the news of the day is. These are the things, which highlight the difference
between broadband phone service and plain old telephone service. We envision the
media-enabled version of our product to reside in the kitchen, which is the last place you
are when you leave the house and the first place you go to when you get home.”
CEOCFO: So you can get
all of this information without an actual computer.
Mr. Harris: “That is correct.”
CEOCFO: What other kinds
of information would you like to make available?
Mr. Harris: “We would love to make available the similar
information that you see on Google or Yahoo, where we could make that content available on
our phone. We want to be able to bring other new and exciting applications to the phone.
Ring tones are a billion-dollar business for the cellular handset market. Not only are we
going to offer a ‘ring tone’ capability for our product but we are also working
on ‘movie tones’. If somebody is calling you from a video telephone enabled
device and they are calling your VisiFone, instead of getting just a ‘ring tone’
they might get a ‘movie tone’, where not only do they get audio, but video as
well. These are applications so we can set the broadband phone experience apart from the
regular telephone experience.”
CEOCFO: How are you
going to make money on this?
Mr. Harris: “We expect to make money in two areas. We
have what we think is going to be a very popular product in the VisiFone. There is margin
associated with the sale of the product, but on an ongoing revenue basis, we expect to
generate revenue on providing sponsored content to the devices installed worldwide. That
is two separate revenue streams; one, being more along the lines of consumer electronics
business where we build the product for ‘X’ and we sell it for ‘Y’ and
then a recurring revenue model in providing the sponsored content. One other revenue
stream is intellectual property. We own five patents in the U.S., eighteen patents abroad,
and we have filed over 50 provisional patents here in the U.S. on our new product and
service from Viseon Media. We fully expect to license some of that intellectual property
when it is appropriate.”
CEOCFO: Is there much of
a barrier to entry?
Mr. Harris: “We expect it to provide a substantial
barrier for entry into potential markets of which we are focusing. Like anything else, it
is a strategy that many other industries have focused on and been successful. We hope it
provides the barrier that we need, but even so, I think we have a considerable head start
in developing this type of product with this type of service attached.”
CEOCFO: How will the
physical product be manufactured?
Mr. Harris: “We will be utilizing contract manufacturing
both here in the U.S. as well as abroad for the volume manufacturing of our product. We
are not concerned with the volume requirements. We have good contract manufacturers that
have good plants located throughout the world.”
CEOCFO: Where do you
roll out your test product?
Mr. Harris: “We are leaving that up to the carrier. What
we have seen in the past is an initial deployment to their test community, followed by a
recap and a processing of how it went and what issues need to be resolved before they put
in a wide scale deployment. That community tends to grow in the short-term and that is
usually a two to three month period, until they get a larger community of users of the
product or services. Once they are comfortable, there internal support staffs are ready to
roll out the product nationwide, then they put out their full force. My expectation with
every carrier is some form of that kind of process. We start out initially with a very
small base of users followed by a doubling in size of users, followed by general rollout.”
CEOCFO: Will you tell us
about the financial picture of the company?
Mr. Harris: “Our last reported balance sheet, had us at
just under $4 million in cash. We have a positive net worth and we are poised to launch
our product. We completed a pipe about a year ago, we have used those funds to develop the
actual electronics and industrial design of our product, and we are preparing to launch.
We are excited with how that has progressed and we are looking forward in getting our
product to market in the next couple of months.”
CEOCFO: In closing, why
should potential investors be interested and what should they know that they might not
realize when they first look at the company Viseon?
Mr. Harris: “I think we are in the right industry at the
right time. There were 35 million US homes at the end of 2004 that had some kind of
broadband access. Those are all potential customers of broadband phone service, which
makes them potential customers for our VisiFone. A number of companies launched into
broadband phone service in 2004. We have spoken to the major players, which offer
broadband phone service about offering our products to their customers. That does not even
include the number of broadband customers of internet access over seas. I am still just
talking about the U.S., which is still just a small portion of the overall market.
Broadband phone service is expected to grow from a million customers today to eighteen
million in 2008; that is just in four short years. The number worldwide of broadband phone
service customers, is expected to be 150 million. In four years we are going to go from a
small number of potential customers to 150 million; that is exciting and a major reason to
be in this business. The issues that are driving video telephony, is the ability of our
application to speak to the 3-G video phones that are being offered in Europe. We have
been talking to a number of European, foreign carriers that participate in the 3-G phone
business and these people need a place to call, and we cannot think of a better place than
our VisiFone. When you look at all of these things along with the fact that a true digital
telephone experience has not existed; we are still using 100-year-old technology for
telephony. This is the first product and service that brings digital to the telephone.
When you talk about where the telephony industry is going and where telecommunications is
going and what our phone has to offer in this industry; we think those are great reasons
to be involved with Viseon.”
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