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Cisco launched Wednesday a package of video-conferencing equipment and services that take the company into the consumer market where it will battle long-time video-calling leader Skype.
Cisco's new product, called Umi (pronounced You-me), marks the network-equipment maker's debut into the consumer space with video-calling, which Cisco calls telepresence. The company has offered high quality and expensive video-conferencing gear for businesses for some time.
Umi comprises a video camera and device that sit between a broadband connection and a flat-panel TV. Cisco claims the set-up is easy.
Umi, which is scheduled to be available Nov. 14, is expected to cost $599 for the equipment, plus a monthly service charge of $24.99 for unlimited video calling. The relatively high price and service fee are likely to be among Cisco's biggest challenges in selling Umi.
The leader in low-cost video calling is Skype, which offers video-conferencing from a home computer or laptop at no charge. Skype also offers a low-rate premium service. As the largest provider of international calls, Skype has 560 million users, with about 40% using the network for video chats, according to the company.
However, Cisco does not need to sell a lot of Umis to be successful. The company's core business is selling network switches and routers, necessary infrastructure for moving video across the Internet. Cisco has been moving aggressively into supporting online video and so as long as video-calling increases over the Internet, Cisco wins, whether or not it becomes a leader in selling equipment to the end user, analysts say.
Nevertheless, Cisco's consumer play appears to be serious. The company said Wednesday it is working closely with Best Buy, the world's largest consumer electronics retailer, in selling Umi. Best Buy will feature the new product in its U.S. stores beginning Nov. 14, in time for the holiday shopping season, and will start taking preorders through its website Oct. 18. Cisco is taking preorders as of Wednesday.
In addition, Best Buy will offer home installation and servicing of Umi through its Geek Squad unit.
Another major partner announced by Cisco is Verizon. The two companies are working together to carry Umi video calling on the carrier's high-speed, fiber-optic network, called FiOS. The service is expected to be available early next year.
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