H.264 is today's leader when it comes to mainstream video encoding technologies, but it will have to share the stage in 2013 with a successor called H.265 that can squeeze a video into nearly half the file size. H.264, also known as the Advanced Video Codec (AVC), defines how a video can be compressed for reduced storage requirements and--very importantly given the online video explosion--for streaming across networks. H.265, also called High Efficiency Video Codec (HEVC), uses new techniques to compress video even more.
The H.265 codec is likely to gain widespread support, but it and H.264 competes with a royalty-free alternative called VP8 that Google has released. Qualcomm competitor Nvidia has built VP8 decoding support into its newer Tegra 3 chips alongside H.264 support.
Qualcomm is bullish about the codec. If a given network capacity can sustain higher-quality video, that means mobile devices are better for entertainment. And because H.265's efficiencies come at the cost of a significantly higher need for processing power, mobile device makers have a new reason to buy the latest chips.
Qualcomm showed a software based encoded demo video, showing race cars peeling around a track, played at a bit rate of 610 kilobits per second on H.265 compared to 1,183Kbps for H.264. The size of the video file itself was 3.10MB for H.265 vs 6.01MB for H.264. Each video had 800x480-pixel resolution. Qualcomm will build H.265 encoding into its chips, though it is not promised when or in which processor model.
See more at a CNET report.