ATLANTA, Georgia (September 27, 1999) -- 8x8, Inc. (Nasdaq: EGHT) - a leading supplier of multimedia communication technology and systems - today introduced the Audacity-T2 IP Telephone Processor, an Internet protocol (IP) telephone on a chip. By combining all of the digital processing circuitry required for a full-function, IP telephone on a single chip, the T2 Processor makes it straightforward for telephony equipment manufacturers to build cost-effective, high-quality telephones for broadband IP network applications. The T2 Processor is ideal for use in IP feature phones for business applications on corporate LANs and consumer IP telephones for use on cable modem and DSL networks. In addition to the processor itself, 8x8 provides all of the software required for IP voice communication, including the H.323 v2, Media Gateway Control Protocol (MGCP), Session Initiation Protocol (SIP) control protocol stacks, and the most popular G.7xx audio compression algorithms (codecs).

Over the next decade, business telephone systems that use LANs are expected to replace today's aging PBX technology. In addition to lowering the cost of deploying and maintaining business telephone systems, IP technology will allow users access to a broad range of new features, including unified messaging, seamless telecommuting and computer telephony integration (CTI). This change in the business telephony landscape will require a new breed of IP-based telephone endpoints that support these advanced features without exceeding the cost of today's telephones.

"Our mission at 8x8 is to build leading-edge products that accelerate the transition from today's outmoded telecommunications infrastructure to packet-switched communications, the medium of the next century," said Dr. Paul Voois, 8x8's chairman and CEO. "We have laid out an aggressive product roadmap, from IP-PBX software and terminal adapter hardware to integrated circuits, that fulfills this mission. A key requirement for broad deployment of packet-switched telephone systems is cost-effective telephone sets, so we have developed the T2 Processor to allow OEMs to build IP telephones that are as affordable as today's business and consumer phones.

"Our T2 Processor combines all of the digital processing horsepower required to build a high-quality, multiline IP telephone or speakerphone on one chip," continued Voois. "No external memory is required. An OEM needs to add only a few commodity analog devices to complete the system. We also supply all of the core software needed to make the phone compatible with today's IP telephony standards. The end result will be high-performance, industry-standard IP phones that are easy to design and inexpensive to produce."

8x8 provides OEMs with all of the control protocol stacks and audio codecs required for IP telephony systems, including H.323 v2, MGCP, SIP, G.711, G.723.1, G.726 and G.729A. The T2 Processor can run two simultaneous calls using any of the supported codecs while executing full-duplex echo cancellation algorithms and a control protocol stack. "8x8's audio codec and control protocol software was specifically written for Internet "appliance" applications rather than PCs," noted Voois, "so our performance is very high and our memory footprint is very small compared to solutions originally targeted at PCs and PSTN gateways."

According to Will Strauss, president of market-watcher Forward Concepts (Tempe, AZ), "The VoIP over LAN market has only just begun, with an estimated 50 thousand client ports to be shipped in 1999. We predict, however, a compound annual growth rate of 187% through 2004, when there will be almost 10 million ports installed worldwide.

"As the first LAN terminal chip designed specifically for VoIP applications, 8x8's T2 Processor is a well thought-out blend of integration and flexibility," continued Strauss. "This level of integration is needed to reach the price points that will drive IP telephony into the broad market for telecommunications. In addition, its support for multiple communications protocols and audio codecs is important because the market has not yet settled on one standard."

The T2 Processor is built around 8x8's MIPS-X5 unified RISC CPU/DSP engine, which is designed to run both compiled 'C' code and DSP algorithms efficiently. In addition to the CPU/DSP engine, the T2 Processor incorporates a 32-channel DMA engine and a non-blocking crosspoint switch with 6.4 gigabytes per second of cross-sectional memory bandwidth to ensure optimal system performance. Sufficient on-chip memory is provided to eliminate the need for external RAM when running any supported communication protocol or codec.

The Audacity-T2 Processor also incorporates dual Ethernet Media Access Controllers (MACs), one for connecting to a network and one for connecting to a computer. The inclusion of MAC functionality allows an IP telephone to serve as a two-channel layer-2 Ethernet switch, eliminating the need for two Ethernet connections to the desktop. This switch facility can be programmed to give priority to audio packets, buffering data packets to and from the attached PC, thus controlling quality of service (QoS). The MACs are full duplex and support both 10 and 100 Mbps data rates.

To eliminate the need for expensive glue logic, the T2 Processor connects directly to network physical layer chips, keypads, and character display devices. Two TDM (time division multiplexed) ports provide multi-channel synchronous interfaces for audio data, permitting connection to a telephone handset, or a microphone and speaker (for speakerphone implementations).

The T2 Processor is packaged in a 176-pin, thin quad flat package (TQFP). The chip is manufactured in a 0.18-micron, 1.8-volt CMOS process with 3.3 volt interfaces. The chip dissipates an estimated 0.25 watts in full operation.

To help OEMs get to market quickly, 8x8 has developed a complete IP phone development kit. The kit includes two fully operable IP feature phone prototypes, a developer's version of 8x8's IntraSwitch IP-PBX server software and all of the documentation required to build the phones (schematic, bill of materials, etc).

To allow developers to easily customize and differentiate their products, 8x8 provides source code for the user interface and device drivers as well as a complete development environment, including a compiler, a debugger and diagnostic software. The resulting package includes everything, from the chip to the software tools, needed to quickly and easily bring cost-effective, high-quality IP phones to market.

Price and Availability

Samples of the Audacity-T2 IP Telephone Processor (part number 8x84700) will be available in December 1999. The T2 Processor is priced at $15 in 100,000-unit volumes. Software development tools and IP telephone design examples will also be available in December.

About 8x8

8x8, Inc. is a leading manufacturer of digital telecommunications technology, including IP telephony gateways, software and semiconductors. By leveraging its technology expertise in audio and video compression and communication protocols, the company is providing systems and software to network and telecommunications equipment providers, cable television system operators and local exchange carriers. For more information, visit 8x8's web site at http://www.8x8.com.