Cisco has recognised it cannot compete with the likes of Skype on pricing and axed its Umi video system
Cisco Systems is reportedly axing its consumer-focused Umi telepresence product, which was released 15 months ago amid sharp criticism over its pricing.
Cisco ended sales of the Umi hardware in December, though the company will continue to support customers who already have bought the products, according to a Cisco spokesperson.
In a statement to CRN 3 January, the spokesman said that “while we are ending the sale of Umi, the Umi service remains unchanged. Existing customers will continue to be able to use the service to make calls to other Umi subscribers or to Google Video Chat accounts.”
Cisco introduced the Umi in October 2010 in a dual attempt to expand its efforts in the consumer space and to grow its video capabilities. The platform included a high-definition camera and embedded microphone, a console and a remote device, and services delivered via the cloud. It was all designed to work with a user’s HD television and high-speed broadband Internet connection to enable customers to make voice and video calls, record and play videos and communicate with other Umi users or those using Google Video Chat.
Initially all that came with a $599 (£384) price tag, along with a $24.95 (£15.99) monthly charge. Cisco executives defended the pricing by saying that Umi was a high-end product that came with a premium price. However, competitors and analysts were critical of the pricing, noting that Skype offered similar capabilities essentially for free, and that there was a plethora of web cameras on the market for a fraction of the cost of Umi.
Told You So
At the time of Umi’s launch, Gartner analyst Nick Jones gave it little chance of it succeeding in a highly competitive market.
“Why would any sane consumer pay $600 plus $30 a month for something which is available for free elsewhere?” Jones said in a blog post at the time. “I can’t imagine how Cisco imagines this product can provide enough value to convince consumers who believe video calls are something that comes for free with Skype. Based on what I know at the moment, I’ll be amazed if it succeeds.”
In March, Cisco cut the pricing for the Umi 1080 from $599 to $499 (£320), and the service from $24.95 a month to $8.25 (£5.28). Officials also announced a lower-cost Umi 720 – which offered lower resolution and required less bandwidth than the 1080 – for $399 (£256).
A month later, the Umi technology became part of Cisco’s larger Telepresence business unit as a step in a larger restructuring program by the company that included dismantling most of its consumer business and shuttering its popular Flip video camera line.
Despite the closing of the Umi business, Cisco is still aggressively expanding its video capabilities to meet a rapidly growing demand.
In a report released in June, Cisco officials said Internet traffic will quadruple by 2015, driven in large part by the growth of video on the web.
By 2012, Internet video will account for as much as 62 percent of all consumer Internet traffic – up from 40 percent in 2010 – video-on-demand traffic will triple by 2015, and that there will be three times as much long-form video as short-form by 2015, according to the company.