Cisco, which has been working for several years on bringing
high-quality video-conferencing to businesses, is apparently
getting ready to launch telepresence products for the consumer
market.
The network equipment maker will introduce a video camera and
device that will connect to people's high-definition TVs and make
it possible for them to do video-conferencing over the Internet,
The Wall Street Journal reported on Thursday. The system will
reportedly cost USD 600 with a USD 30 per month service
subscription. Cisco on Thursday declined comment.
Cisco, whose core business remains selling switches and routers
to businesses and telecommunication companies, uses the term
"telepresence" to describe its video-conferencing products. The
systems tap the Internet as the communication pipeline and are part
of Cisco's overall strategy of supplying a growing number of
products for moving video over the Internet.
The strategy makes sense given the increasing amount of online
video being delivered to Websites, smartphones, tablet computers
and just about any other video-capable, Internet-connected device.
In July, for example, 178 million U.S. Internet users watched an
average of 14.7 hours of online vide, according to ComScore.
But while video watching is growing, telepresence, a business
Cisco has been in since 2006, remains a small portion of the
overall number of group videoconferencing units sold. According to
research firm TeleSpan, telepresence accounted for just 3 percent
of unit shipments to businesses.
Cisco's competitors in the business market include large tech
companies like Hewlett-Packard, Polycom, LifeSize Communications,
Teliris and Huawei Technologies. However, in the consumer market,
Cisco will be competing against makers of cheap webcams and
low-priced video-conferencing services such as Skype.
In addition, smartphone makers are adding video conferencing to
their devices. Apple, for example, introduced video calling on the
iPhone in June with the introduction of the fourth version of the
smartphone. With such inexpensive and, in the case of smartphones,
more convenient means of video calling, it's difficult to see why
people would want to spend several hundred dollars on equipment,
plus an additional subscription fee.
"It's going to be a very nichey market and price is going to be
going against them," Amanda Sabia, analyst for Gartner, said of
Cisco's reported plans.
A recent survey by Gartner showed that roughly 20 percent of
people from ages 13 to 74 do video calling today, which amounts to
about 24 million U.S households. In time, that market is expected
to increase.
"It's a market that will eventually grow, but it will be a very
slow adoption into the mainstream," Sabia said.
Nevertheless, from a technical standpoint, the consumer market
is more ready than ever for video conferencing. The majority of
U.S. households today have high-speed Internet connections and
high-definition flat-panel TVs are ubiquitous.
Cisco has been building out its telepresence technology through
acquisitions. The company recently bought conferencing specialist
Tandberg ASA for USD 3.3 billion. On the consumer side, Cisco in
March 2009 paid USD 590 million for Pure Digital Technologies,
maker of the easy-to-use and inexpensive Flip video recorder.
Cisco claims its 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.