Bandwidth and processing requirements of multimedia applications typically exceed capabilities of portable terminals with current technology. Applications should hence be able to accommodate their requirements to run on these devices. In this paper, we provide a performance characterization of a video codec based on techniques such as hierarchical vector quantization which trade off complexity and reproduction quality. Comparison with standard codecs shows a remarkable reduction of coding times, such that real-time coding/decoding of video becomes possible even on low-power devices. This complexity reduction is counterbalanced by reproduction quality impairment. Nevertheless, for application such as videoconference, subjective quality seems to be fairly acceptable. Our analysis also quantifies some limitations of low-power devices with current technology.