If Cisco is going to succeed, it's off to the right start. Umi comes out of its emerging technology group, headed by Cisco veteran executive Marthin De Beer, sure to be next on the exodus list if history is any guide. Umi also has its own group, and Cisco's consumer business has its own marketing VP. The Umi technology is also new; not, as one would think, playing off existing product expertise from the likes of Tandberg (cameras and video encoding) and Scientific Atlanta (set top boxes), but built from the ground up. Don't look now, but Cisco might just be more than an acquisition machine (also see: Cius and Quad). Instead of trying to retrofit existing technology and foist it on a new market, Cisco addressed the new market with a fresh approach.
The other edge of that sword: Cisco can't expect to become a consumer technology winner overnight, even if Oprah gives each audience member a Umi for Christmas. Linksys and Flip (from its Pure Digital acquisition) remain the known consumer brands, even if Cisco's name is on the products. Ultimately the Umi technology will also have to stand on its own.
For the consumers Cisco showed off in its demos -- families, grandparents, children -- the technology has to be dead simple. Other than a few simple cables (HDMI from the Umi set top box to the TV and to your existing DVR and/or set top box, HDMI and USB from the Umi set top box to the Umi camera, Ethernet -- wired or wireless -- out to through your existing Internet connection, and brackets for the camera to attach to your existing HD TV) there's not much to it. The remote control unit can pan, zoom and tilt the camera, and it brings up a very small "clover" on the TV, from which you make or accept a video call, record video messages, sort through your contacts (or add them), and adjust minor items like your profile picture or video greeting. You can also forward video messages (unless the creator makes them private). All video stored in the Umi cloud can be accessed via the Web, including on devices like iPads or smart phones.
There are also some important privacy controls -- Cisco said that early consumer testing revealed fears that the camera would somehow be a window into the living room. In fact, the camera shutter is automatically closed when not in use. You can set up Umi to only receive calls from contacts; you can block callers; and there is a parental lock feature as well.
All of this runs in the Cisco Umi cloud. One hopes that little tidbit won't be part of the consumer marketing experience -- you can just see the suburban couple at Best Buy hearing that part and wondering about the retail company's drug testing policies. But the cloud is the service; it's where video messages are stored, it houses the web portal where contacts are managed, and it administers the Umi experience.
Cisco has taken a page from Apple's book: it controls the quality of the experience through its hardware. And the quality looks amazing. Granted, the demonstrations are controlled in settings that Cisco oversees (and buys the bandwidth for), but the combination of high definition video camera and video encoder coupled with high-speed Internet access and a high definition television ... well, it's easy to see why grandpa's going to wet himself a little.
Or, he may have seen the price tag. $599 for this kind of hardware seems almost reasonable, if a little high. Add $24.99 a month for the service, and now there's a hesitation. Here's the kicker: who will you telepresence with? That's right: grandpa needs to buy one for each set of grandchildren (woe to ones who don't get one; note: you're probably also not in his will). That's if everyone's got HD TVs and high speed connections. The system will provide 1080p high definition video, but you've got to have 3.5 Mbps up and down to support that. The good news is that it will dynamically throttle down, but you still need a solid 1.5 Mbps up and down for 720p. For this reason, it's also not possible to do anything but video chat OR watch television. No picture in picture here -- you can't watch a football game while nodding absently while a loved one rails against the man.
Cisco would do well to interoperate with a variety of other technologies, and fast. It's already done so with Google; not only can Umi participate in Google video chats, you can add your Google Talk contacts to Umi (otherwise you add them by hand). Cisco's next moves need to include Skype, Yahoo, Microsoft, iChat and FaceTime.Sure, the quality is going to be a fraction of what a complete Umi experience can offer, but it's not exactly like watching an IMAX film on a smartphone either. If consumers are going to buy these one at a time, they'll get the most out of the experience by using it often, and that means a heavy duty contact list from all available sources. Come on Cisco! You probably even know somebody at Skype.
Users will weigh whether Skype video is good enough. You could also envision an iPhone running FaceTime having a video chat over TV using the Apple TV product or its Apple Composite AV Cable kit. Cisco believes that high definition will be important for immersive, emotional connections like video chats. The argument that its core routing and switching business stands to gain from that is a foregone conclusion, of course, but given the efforts Cisco is putting into Umi, it clearly plans to succeed based on the product's merits as well. It has had Umi in homes with 1,000 customers since March, taking feedback and revising the product, even requiring that its testers complete feedback assignments.
De Beer talked about virtualized services into the home: what Cisco calls "health presence," along with education, government services, and wealth management. There's truly a market for that, but first Umi has to make huge inroads for those businesses to be interested.
Best Buy and Cisco are already taking orders for Umi. Best Buy also offers installation, if necessary. Cisco has also been in field trials with Verizon, and the carrier plans to offer Umi on its FIOS service in early 2011.
Fritz Nelson is the editorial director for InformationWeek and the Executive Producer of TechWebTV. Fritz writes about startups and established companies alike, but likes to exploit multiple forms of media into his writing.
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