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.