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* Videoconferencing has become economically viable only by using special techniques that drastically reduced the amount of required transmitted information. Fortunately, every picture contains a large amount of redundancy. There are always areas that do not contain details and thus, do not call for the transmission of a large amount of information. Even with a large amount of detail, if the detail does not change rapidly, very little information must be transmitted. Furthermore, even in the case of a fast moving scene, the changes at any one point are limited and often predictable. Thus, it is not always necessary to transmit a complete picture. Limiting the transmitted information to changes is generally sufficient to reconstruct the picture at the receiving location. Applying such techniques can result in a large amount of bandwidth compression or data rate reduction. Unfortunately, most compression techniques result in at least some loss of picture quality. * Polycom has managed to penetrate nearly every industrial sector in China. We have recorded many successes particularly in the Government and telecom sectors. The Ministry of Agriculture are using Polycom products and solutions in 31 provinces while China Unicom uses our products in their IP video conference network which is the largest of its kind in the world. In the Asia Pacific region, hospitals and other healthcare providers are finding the value of using video conferencing for teaching, patient healthcare etc. We believe this sector will become just as important to Polycom in China and we are recording some success in the region but will be trying to gain further traction this year and beyond. Video Conferencing is increasingly being used for distance learning, not just in schools and universities but in major corporations, hospitals and government for training. And with our initiatives to increase regional distribution and working with China UniCom on their Uni-Video project, we intend to p
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