Blog Post

Cisco’s Quest For A Piece Of The Future-Of-TV Pie

Today, Cisco (NSDQ: CSCO) unveiled its home telepresence solution called Umi (pronounced you-me, get it?) . For those of us who aren’t familiar with Cisco’s use of the term telepresence, it’s a term they coined to describe the very impressive (and very expensive) enterprise immersive video conferencing experience they provide 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 video conference 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 (SEO: 066570) 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 (NSDQ: GOOG) 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 (NSDQ: AAPL), 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 (NSDQ: CMCSA), Nokia (NYSE: NOK), 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 video conferencing (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.

James McQuivey is an analyst at Forrester Research, where he serves Consumer Product Strategy professionals. James blogs here.

This article originally appeared in Forrester Research.