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Cisco cuts costs of Umi home videoconferencing

Stephen Lawson | March 7, 2011
The service price is now US$99 per year and a new 720p unit costs US$399

The Cisco Umi 720, which will include an HD camera, a console and a remote, is scheduled to go on sale early in the summer.

One thing Umi still can't do is let two people watch a live TV show together while carrying on a Umi session in a window on the screen. Cisco Chairman and CEO John Chambers has often espoused this concept, but delays in live TV broadcasts prevented Cisco from adding it, an executive said last October.

Cisco's price cuts, especially on the service fee, should help it sell more Umi systems, analysts said.

"It certainly is going to encourage consumers who may have been on the fence," said Parks Associates analyst Kurt Scherf. Service providers are an ideal sales channel for the systems, and success will depend in part on how much the carriers subsidize the equipment cost or discount the service through bundling, he said. Verizon Communications plans to offer Umi to users of its FiOS high-speed broadband service this year.

While less expensive gear will help to attract customers, the reduction in the service fee is the most important step Cisco has taken, said Wainhouse Research analyst Ira Weinstein.

"Changing the monthly fee, we think, is changing the entire thought process around the offering," Weinstein said. A monthly charge of just under $10 is the kind of service fee that many consumers could set up and basically forget about, he said.

Even though Cisco said it integrated Umi with TelePresence primarily for business-to-consumer use, both analysts believe a lot of enterprises will be interested in setting up home workers with Umi. Now that their conferencing options are growing, companies and workers will deploy the tools that make sense for them, Weinstein said. For example, some employees may sit in front of a TV using Umi while running WebEx on a laptop for data sharing.

"We're going to see a lot of permutations, and combinations, and hybrid meetings, and the good news is, that's the way it should be," Weinstein said.


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