Cisco, looking to become a bigger player in the consumer video conferencing space, is lowering the cost of its Umi home telepresence offering.
Cisco
Systems officials, who faced criticism over the cost of the company's Umi
consumer video conferencing offering when it launched in October 2010, are
now driving down the cost and expanding the options of the platform as they
look to grow the business.
Cisco
on March 7 announced a price cut of $100 for the Umi 1080, from $599 to $499,
as well as the service cost, from $24.95 a month-or about $300 a year-to $99
year, or $8.25 a month. In addition, Cisco is adding a new system, the Umi 720,
another consumer telepresence offering, which delivers lower resolution and
requires less bandwidth than the 1080 and comes in at $399.
The
service plan for the Umi 720 also is $99 a year.
At
the same time, Cisco officials rolled out the Umi Connect, a free
high-definition calling client for PCs and Macs. Umi Connect is currently
running in trials, according to the company. Cisco also is offering full
interoperability between Umi and the company's high-end TelePresence business
platform.
By
expanding its Umi offerings and making it easier for consumers to buy the
platform, Cisco is working to more broadly cover the burgeoning video
conferencing space, according to Marthin De Beer, senior vice president of
Cisco's TelePresence, Emerging Technologies and Consumer Business.
"With
today's announcement, Cisco is continuing to deliver innovative, market-leading
video and telepresence solutions that enable consumers to connect and transact
with businesses from the comfort of their home," De Beer said in a
statement. "By offering a range of video solutions-from high-end
Cisco TelePresence for business to the free Cisco Umi Connect product-we are
extending our leadership in telepresence and driving the pervasive use of HD
video."
Cisco
officials believe video traffic will continue to grow. Currently about half of
all Internet traffic is video; the company believes that will grow to more than
90 percent by 2014. Cisco has aggressively worked to expand its video
conferencing in the corporate realm through its TelePresence and various video
collaboration offerings. It grew its business substantially last year when it
bought rival Tandberg.
Cisco
competes with a wide range of vendors in the video conferencing space,
including Polycom, Logitech's LifeSize Communications business and
Hewlett-Packard.
Umi
was seen as a way for Cisco to drive deeper into the consumer area. The company
already had acquired the Flip video camera when it bought Pure Digital, and
set-top boxes with its acquisition of Scientific-Atlanta.
With
Umi, Cisco is looking to expand its consumer reach. The platform includes an HD
camera and embedded microphone, a console and a remote device, and services
delivered through a cloud environment. It works with the user's HD television
and high-speed broadband Internet connection. Users can make voice and video
calls, record and play videos, and communicate with people using Google Video
Chat.
A
criticism from rivals and analysts focused on the cost. With Umi, Cisco is
moving into an area dominated by the likes of Skype, which offers the bulk of
its audio and video conferencing technology free to consumers. At the launch of
Umi, Cisco officials argued that the quality of the platform was unmatched by
Skype and others.
"It's
a premium product at a premium price point," Ken Wirt, vice president of
consumer marketing for Cisco, said at the time.
Others
were not so sure. When Umi first launched, Gartner analyst Nick Jones said
there was no clear data on consumer demand for such high-end video conferencing
offerings, and that Skype and other low-cost options would easily meet that
demand. There also are a lot of Webcams on the market, and laptops with plenty
of computing power that can be plugged into a television.
"And
thirdly-and worst of all-why would any sane consumer pay $600 plus $30 a month
for something which is available for free elsewhere?" Jones said in a blog
post at the time. "I can't imagine how Cisco imagines this product can
provide enough value to convince consumers who believe video calls are
something that comes for free with Skype. Based on what I know at the
moment I'll be amazed if it succeeds."
The
new pricing on the Umi 1080 and the new Umi 720 are Cisco's attempts at meeting
the demand with lower costs. The Umi 720 will be available this summer, and Umi
Connect is expected to be available for download this summer.
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