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Vector quantization (VQ) is a powerful technique for low bit rate image coding. However, initial studies of image coding with VQ have revealed difficulities, most notably edge degradation and high computational complexity. Although there are many algorithms developed to keep the image from edge degradation, such as block truncation coding with VQ (BTC/VQ) or classified vector quantization, the compression ratio could not be satisfactory. On the other hand, discrete cosine transform with VQ (DCT/VQ) has beeb applied to image compression, it gains high compression ratio but the edge degradation problem still exists. We present an image compression algorithm that takes the advantage of the DCT/VQ and BTC/VQ to achieve a high quality and low-bit rate compression of images. High quality image can be achieved at rates 0.34 .. 0.46 (bits/pixel).
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