Smile! You're on AT&T;'s VideoPhone! And it only costs $1,500

American Telephone & Telegraph Co. yesterday introduced a $1,500 telephone that features color, full-motion video, representing what AT&T; hopes will be the first of many video offerings for the home communications market.

"We are bringing human sight and sound together at last," said Robert M. Kavner, group executive for AT&T; Communications Products. "Not just for the rich. Not just for big corporations. But for everybody. Visual communications has begun."


Dubbed VideoPhone 2500, the new AT&T; phone uses advanced compression techniques to send full-motion video pictures of callers across regular phone lines, a first for the telecommunications industry.

The unit looks like a regular phone with a small fold-up screen and a miniature, built-in camera lens. Callers dial as they would normally, then depress a key to activate the video function, which sends full-motion video at a rate of about 10 frames per second. A built-in shutter is provided for privacy, when desired.


The phone can be used to call any phone anywhere in the world, but to get the video effect callers must dial another VideoPhone 2500 unit. The unit is now limited to use in the United States, but AT&T; said it is in the process of modifying the series so that it can be used in foreign markets.

The VideoPhone represents AT&T;'s second run at the home videophone market.

Its first entry in the 1960s, known as the PicturePhone, was a marketing disaster. The product, which made a splashy debut at the 1964 World's Fair, was pulled shortly after it was introduced when buyers balked.

Kenneth Bertaccini, president of AT&T; Consumer Products, said AT&T; conducted extensive marketing surveys to assure that the VideoPhone 2500 would not suffer the same fate as the failed PicturePhone.

"We didn't sit in a closet and dream this up," he said. "We feel confident we have what consumers want."

But some analysts predicted yesterday that the VideoPhone's $1,500 price tag would continue to keep buyers away -- at least until the cost comes down.

James Ivers, a senior analyst with Strategic Telestrategies in New York, said the price of the phone would likely have to fall to the $100 range before it would gain widespread acceptance with price-conscious consumers.

The AT&T; VideoPhone 2500 will be available in May at AT&T; Phone Centers nationwide for $1,499.