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Cisco Announces Umi Home Telepresence Service: Page 2 of 2

Cisco Umi
Cisco Umi Takes Telepresence To The Home

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Cisco is also spending big on marketing. The company has lined up "The Oprah Winfrey Show," which will take calls from viewers via Umi. Actor Ellen Page, who starred in the popular movies "Juno" and "Inception," will be featured as part of a national marketing campaign. Cisco also plans to take Umi to more than 20 major U.S. malls beginning Nov. 10 to try to entice holiday shoppers.

Nevertheless, Cisco will need more than marketing and partnerships to take Umi to mainstream consumers, the majority of whom do not place video-calling as a high priority. A recent survey by Gartner showed that roughly 20% of people from ages 13 to 74 do video calling today, which amounts to about 24 million U.S households.

Gartner analyst Amanda Sabia predicts Umi will capture only a sliver of the market, at least in the short term. Besides price, Umi's biggest drawback is the small number of people it will be able to reach. Umi can only reach other Umi users or people who use Google's video chat on their computer.

"Why would I spend 25 bucks (a month) for that?" Sabia told InformationWeek. "God bless them, I'm not saying how successful they're going to be, but it does seem like there isn't a whole lot of need for this."

However, Cisco could find customers among people who would have a need for high-definition video calling offered by Umi. For example, it could be used by the sick or elderly in video-conferencing with doctors, or by wealthy people who need to talk regularly with a financial adviser. There's also the possibility that Umi could someday find a place in online education.

From a technical standpoint, the consumer market is more ready than ever for video conferencing. The majority of U.S. households today have broadband connections and high-definition flat-panel TVs are ubiquitous. However, not all broadband connections are at speeds high enough for high-definition video.

Cisco has been building out its telepresence technology through acquisitions. The company recently bought business conferencing specialist Tandberg ASA for $3.3 billion. On the consumer side, Cisco in March 2009 paid $590 million for Pure Digital Technologies, maker of the easy-to-use and inexpensive Flip video recorder.

Cisco claims its business telepresence line has become one of the fastest-growing internally developed products in the company's history. Cisco counts 600 telepresence customers worldwide, including 50 of the Fortune 500. Overall, the companies encompass 3,000 installed systems, with the hottest verticals being telecom, banking, healthcare and government.

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Cisco Completes $3.3 Billion Tandberg Buy

Cisco To Introduce Home Telepresence System