Cisco announced that it will exit part of its consumer business and realign its operations. As part of the move, the company will close down its Flip video camera business (with plans to support current FlipShare customers and partners with a transition plan) and move the Cisco umi products and service into the company’s Business TelePresence product line.
Cisco launched umi in October 2010 as a high-end alternative for consumer telepresence, using the living room HDTV as part of the system. With the reorganization, Cisco will focus on key priorities that include core routing, switching and services; collaboration; architectures; and video.
IN DEPTH: Cisco seeks a new angle for umi
Cisco isn’t entirely abandoning the consumer market, since it will keep its Home Networking business (based largely on product that have or came from the Linksys acquisition in 2003) along with the video business it acquired when it bought Scientific Atlanta in 2005. However, its move leaves open opportunities for other consumer telepresence providers like Logitech, Google and Skype to capture additional market share.
In a prepared statement commenting on the changes, John Chambers, Cisco chairman and CEO, said that his company is “making key, targeted moves as we align operations in support of our network-centric platform strategy. As we move forward, our consumer efforts will focus on how we help our enterprise and service provider customers optimize and expand their offerings for consumers, and help ensure the network’s ability to deliver on those offerings.”
Our observations: Cisco set the gold standard for consumer telepresence with umi features and picture quality. Yet despite interoperability between the Cisco Business TelePresence line and a recent umi price cut, Cisco umi never took off compared to other cheaper alternatives. Cisco was a bit vague in its prepared remarks about how umi might be positioned in the future, but one option would be to offer umi as a cheaper alternative to its high-end TelePresence solutions, especially for the small business segment. However, to do so, umi would need to add in multi-point options to umi and prove interoperability with a greater number of HD conferencing vendors. If the solution proves successful for the business marker, Cisco could also offer umi outside of the U.S., since it is currently limited to U.S. sales.
