Cisco Umi Offers A Backdoor To The Future Of TV

Today, Cisco unveiled its home telepresence solution called Umi (prounounced you-me, get it?). For those of us who aren't familiar with Cisco's use of the term telepresence, it's a term it coined to describe the very impressive (and very expensive) enterprise immersive videoconferencing experience it provides to businesses around the world. In the home, it basically means TV-based videoconferencing. 

The home offering is similar to the enterprise version in two key ways -- it is also impressive and expensive. Starting November 14, affluent consumers who really want to connect with family across great distances (and who are either unaware of or uninterested in Skype) can put down $599 and sign up for a $24.99 monthly Umi service fee and become HD videoconferencers. I tried the system in a real home and I'll admit the quality is eye-opening. As is the price. Read more of the details here in this post from CNET, but some of the less obvious points include: video voicemail, video voicegreetings, and the ability to record video messages when not connected to someone else. The camera rests above your TV screen and makes for one of the most believable videoconference setups I've seen (the person you speak to actually appears to be looking at you, imagine that). The whole experience rides on top of the existing video input so that while you watch TV you can see a message indicating a call is coming in. Choose not to take it and it will go to video voicemail. There are nice touches like a privacy-minded sliding shutter over the camera (complete with "shooshing" noise when the shutter closes) that helps you know via the senses of sight and sound that your camera is not on. So go ahead and give the missus a kiss while on the couch, no one is looking.

It's likely that Cisco is hoping its service provider partners (the CNET article suggests Verizon will offer this in 2011) will subsidize the devices or service fees to make the prices a bit more realistic for mainstream homes. But any debate over the price vs. quality tradeoff will likely disappear over the next year as costs come down and cheaper, lower-quality alternatives like Skype built in to an LG TV or Microsoft's Xbox 360 video Kinect conference option hits homes next month. 

What I'm more interested in is Cisco's possible play for the future of the TV.

Google wants a piece of the same pie (I've written favorably about this in the past and am, in fact, sitting outside a swank Soho location where Logitech is about to debut its Google TV product line). Apple, despite its rather ho-hum Apple TV refresh, still has an ace or two up its sleeve. Microsoft's Kinect will set a new bar for everyone else in many ways, including videoconferencing, and don't discount a variety of other players who are aiming to win or retain control over the TV (including Comcast, Nokia, and the list goes on). Note that all of these competitors are coming from completely different positions in the market.

It wasn't until I saw Umi that I realized that Cisco is on is yet another path to the future of TV. If Cisco could get this powerful device in a few million homes, all it would need to do is release an SDK and encourage developers to add the many apps that this setup is practically begging to see developed. I'll write more about these apps in a future Forrester report, because it takes some time to set them up, but just imagine one of many scenarios: a violin teacher from a nearby university tutors your child (and, perhaps, other children in other locations at the same time) and uses apps that ride on top of the screen checking for correct instrument tuning and that map the student's performance against the sheet music to point out errors in timing, notes, or dynamics. There are literally hundreds of specific uses for TV based apps that involve person-to-person videoconferencing (or telepresence, thank you Cisco). 

Will Cisco do this? Will someone else beat them to it? Cisco has to crawl first, so consider today's announcement a small crawl for Cisco, but a giant toddle for all of person-to-person TV interactivity. 


The iPhone trick again

I'm assuming they will launch it at $599 and quickly drop it to $300 or less (just as Apple quickly cut prices with the first iPhone). At the current price point it's hard to imagine many purchases, especially if you bear in mind the 'I'll wait until others get one' Catch 22 factor. Very interesting for SMBs though.

Did Cisco predict any kind of expected uptake?

True re: SMBs

You're right on the SMB side, especially for in-home or other in-person consultations (medical, financial advisor, insurance, etc.). Those things could really benefit from this especially if people have them in their homes. However, you don't have to have one to interoperate -- you can use Google Chat as well, though the quality will obviously suffer. This is a trend in the new video conferencing solutions: Microsoft Kinect will let you speak to people with Windows Messenger, Cisco Umi will work with Google Chat, and Google TV will work with Logitech's own messenger platform (and one assumes Google Chat as well). That helps alleviate the Catch 22 you mention.

On the pricing, they have to keep the price high because all their cable partners (who buy their set top boxes from the former Scientific Atlanta division of Cisco) want to do their own VC services, some with and some without Cisco's technology. So Cisco will keep the price high in hopes that the cable companies will not rebel at the competition and stop buying Cisco SA set top boxes. And, no, they did not predict any kind of uptake.

Umi vs 'good enough'

Yes, could be compelling for virtual consultations, where customers seeing the vendor is more important than vice versa. But two observations:

1) Umi is fighting 'good enough'. Home users who can easily use Skype to talk to people abroad (like I do) will not buy Umi unless the others do too. (The benefit of owning an Umi goes to the *other* people in a conversation, who can now see you clearly, while you, the purchaser of a pricey Umi system, still put up with bad webcam video and lo-fi sound)

2) Betting on the MSOs is a loser -- look at the horrible failure of Verizon's video call offering. The winners will be open and not tied in to dumb bitpipes who wish they were not dumb bitpipes.

My guess is that Microsoft and Google will be the big winners in this space, on the biz side -- as they are software-based and control the endpoints (MS Outlook and Gmail). On the consumer side, Facebook could get into this in a year or two. It just launched group IM today, and video chat is a natural progression. These software guys could just cut out and commoditize the hardware side, the same as Skype did to webcam makers (who would seriously use 'Logitech chat').

for B2B, not for B2C

Wihout having used Umi I estimate Cisco to have launched a high quality product, that is likely able to beat the other freely available and rather consumer focussed solutions in terms of quality and usability. Nevertheless, I am not sure if the Cisco business model is sustainable for B2C
But the interesting thing to me isn't the price. it's much more that the users are just used to the freely available service they are using for private purposes. Therefore they are used to those tools in the long run anyway. First indicators are Skype-integration in TV sets etc.
I think B2B is willing to spend money for a reliable tool without any annoying ads.
But as I am following this discussion from the viewing angle of a B2C company, I am rather hoping for a better usability of the Skypes and Google Chats.....