While the rest of the telecom industry is worried about launching 2.5 and 3G phone services, NeoMagic Corporation is using the current 2G standards to offer streaming MPEG-4 video and audio.

The company said only slight changes in its chip architecture was needed to allow for the streaming of over wire line and cellular connections with bandwidth ranging from 9.6K to 56K bits per second.

The Santa Clara, Calif.-based company known for its System-On-Chip (SOC) solutions is showing off its advances at the National Association of Broadcasters conference in Las Vegas this week.

"What we're doing is helping boost the cell phone and handheld marketplace now," said NeoMagic vice president of marketing Mark Singer. "In order to achieve notably higher compression ratios the company uses more complex video and image processing algorithms, which require higher levels of processing performance."

NeoMagic says the way to do that is to develop the technology for extremely low bit-rate video based on the MPEG-4 specifications.

For example, the real time compression of MPEG-4 video at bit rates are down to 4Kbps, audio compression at bit rates down to 2Kbps and the streaming over wire line or wireless interface with overhead of 2Kbps.

Using its Associative Processor Array (APA) technology NeoMagic said it can deliver extremely high levels of video and imaging processing capability at low clock rates, and thus at low power consumption for handheld battery-operated systems.

"The great thing about the technology is that we can do this using current 2G standards," said Singer. "We don't

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NeoMagic is currently marketing its solution to phone companies like NTT DoCoMo, Siemens and Motorola as well as PDA makers like Palm and Handspring.