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September 30, 2010
September 30, 2010

Cisco to Enter Consumer Market with Video Conferencing Solutions

By Susan J. Campbell, TMCnet Contributing Editor

Cisco is well-known for the powerful video conferencing solutions it brings to the enterprise. The high-quality technology offerings have traditionally been out of reach for most small businesses and consumers simply due to cost -- until now.

According to a Wall Street Journal report, Cisco (News - Alert) has recognized the opportunity in the consumer market and is reportedly working on a consumer-level version of its high-end video conferencing technology.

This will be an interesting move into a space that is typically dominated by Webcams and free services, including Skype (News - Alert). Cisco’s version will include a video camera and a device that connects users’ high-definition TV to the Internet. Pricing is expected to be $600, with a $30 a month subscription fee. 

Cisco is slated to officially announce the product at a scheduled news conference next Wednesday. 

Cisco’s focus on the consumer sector of the market isn’t surprising given estimates that video will be a major driver of Internet traffic in coming years. This move is positioned to raise the company’s profile with consumers, a sector that has remained almost ignored by the company focused on service corporations and telecommunications carriers. 

A move to a more narrow focus on video has been in the works for some time. Cisco has been promoting its conference-room setups under the concept of “telepresence,” hoping to drive the realism of the experience.

Recent acquisitions aren’t hurting either as Cisco recently spent $3.3 billion to purchase Tandberg ASA and $590 million for Pure Digital Technologies Inc. In August, Cisco announced plans to acquire ExtendMedia (News - Alert), a software company that focuses on solutions that allow media companies to send video to computers and mobile devices. 

While some may question the Cisco price-point among the free options at the consumer level, there is a growing interest for more sophisticated video conferencing solutions. Another element to the competition will be Panasonic Corp., LG Electronics (News - Alert) and Samsung Electronics Co., both of which announced plans to integrate Skype's software into their flat-panel TVs. 

Interestingly, there still seems to be divided opinions when it comes to video conferencing at the consumer level. While the iPhone 4 offers its own version and Skype is definitely a user favorite, is there enough demand to warrant a $30 per month subscription fee, especially when this is placed on top of subscriptions for broadband, wireless and TV already? 

Would Cisco stand to be better positioned if it partnered with carriers or broadband providers to offer its solutions in a bundle that extends the value of that bundle and creates a better perception among the consumer base? 

To find out more about Cisco, visit the company at ITEXPO West 2010. To be held Oct. 4 to 6 in Los Angeles, ITEXPO is the world’s premier IP communications event. Hans Hwang, Vice President of Advanced Services, Worldwide Collaboration Practice, Cisco Systems (News - Alert), Inc., is speaking during “Integration Strategies for Multi-vendor UC Solutions.” Don’t wait. Register now.

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf


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