The software codec is a real-time video-processing technology developed by Office Noa Inc., a small company launched here in 1988. "Nancy is the lightest video codec," said Noriko Kajiki, Office Noa's chief executive. The company has demonstrated video transmission to a notebook PC at 512 kbits/second, to a PDA at 256 kbits/s and to a cell phone at 28.8 to 32 kbits/s.

Kajiki reported getting the cold shoulder on a promotional trip to Silicon Valley in the late 1990s, but recent alliances in Korea and Japan have given Nancy a higher profile.

In February, Office Noa forged partnerships with both LG Telecom and Interpulse in Korea. Moreover, "The Korean Ministry of Information and Communication invited Office Noa to join the standardization work in compression technology for cellular phones in Korea," Kajiki said. "It is quite probable for Nancy to become the standard video codec in Korea."

Then, in June, Office Noa established a joint-venture company in Beijing with Chinese government affiliates to jointly develop cellular phone equipment using Nancy as the core technology. China owns 70 percent of the equity of the joint company, with a capital investment of $1 million; Office Noa holds the rest.

The fruits of the collaboration will be used mainly in terminals for China Mobile, the largest cellular phone carrier in China. It plans to offer third-generation (3G) services around 2003.

"Video distribution is expected to become possible from 3G phones, but it requires a huge investment," Kajiki said. "If video distribution becomes possible before 3G, it should be a big contribution to carriers." Thus, "Our first target is 2G or 2.5G phone markets. If the data rate is at less than 28.8 kbits/s, MPEG-4 cannot enter this field."

Proprietary algorithm

Nancy is aiming to displace MPEG-4 in applications that demand limited code space and extended battery life. The codec is based on a proprietary algorithm called Structured Meta Scale Polygon, which divides images into blocks of various shapes and sizes for compression. The current version uses square blocks ranging from 1 x 1 to 32 x 32 pixels to divide an image, depending on its complexity. MPEG-4 uses discrete-cosine-transform and motion-estimation technologies. By contrast, Nancy uses only the four fundamental processes of arithmetic (addition, subtraction, multiplication and division), along with comparison and bit-shift operation. This keeps its operation light, said Koichi Kato, chief technology officer at Office Noa.

The codec will run "even if CPU power is not high," said Kato. "A 50-Mips CPU can compress and decompress video at 30 frames per second with QCIF [176 x 144-pixel] resolution [using Nancy]. There is no other video codec in a software form that can encode and decode." The program for real-time video compression and decompression takes 30 to 40 kbytes of memory, "and consumes about one-tenth of the power compared with MPEG-4 operation," he added.

Those specs have drawn the interest of vendors like Sharp and Texas Instruments and service providers like Vodafone.

J-Phone Co. Ltd., the third-largest cellular phone carrier in Japan, which merged into the Vodafone group in May, said it is adopting Nancy to differentiate its cellular phones. J-Phone is promoting handsets equipped with built-in cameras, using terminals at the 2.5G level. The company says its camera phones can easily take pictures and send them as e-mail, and has acquired nearly 3 million subscribers for the service.

J-Phone plans to upgrade the service to video e-mail using Nancy technology. Cell phone models ready for video e-mailing will be introduced early next year, the company said.

Sharp, for its part, chose Nancy for its latest Zaurus, which hit the Japanese market in September, after evaluating its compactness. "Nancy requires quite little system resources," said a Sharp spokesman. "Thanks to the compactness, we could improve sound quality from monaural sound on the previous model to stereo sound [MP3]" in the new MI-E21 Zaurus.

Sharp was one of the early adopters of MPEG-4, introducing an MPEG-4 video recorder and a Zaurus with an MPEG-4 player in December 2000.

"For MPEG-4, a dedicated LSI chip is necessary to suppress block noises. MPEG-4 decoding sometimes became too much load for the system," said the spokesman. By contrast, "Nancy plays video very smoothly and block noise is hardly visible."