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Cisco Launches umi Home TelePresence with Thoughts and Analysis From Telepresence Options Publisher Howard S. Lichtman

October 6, 2010 | Howard Lichtman
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Cisco Systems announced Cisco umi (you-me) today, a consumer telepresence solutions that allows people to place high definition video calls using their existing HD television set and broadband internet connection. The Cisco umi solution will be sold at Best Buy starting November 14th (Just in time for the Christmas season)  and other electronics retailers and will require a $24.99 monthly / ~$300 yearly service charge.

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Cisco umi has its own high definition pan-tilt-zoom camera, remote control,
and set top box - HD Television with HDMI & Broadband Internet required



Hardware & Bandwidth Specifics
Cisco umi includes a  high-definition pan-tilt-zoom camera with an embedded microphone, a set-top box, and a remote, but you'll need your own HD TV (1080p) with HDMI input and broadband Internet connection to use it. There is no external microphone. The system is capable of 1080p HD video and requires 3.5MBps for 1080p and 1.5 MBps for 720p.  If 1080p isn't available, umi will auto-negotiate the bandwidth down to 720p or even 480p quality. There is no capability for multi-point calls. 

Cloud Services
Cisco umi is a cloud services business model.  Users pay their monthly subscription fee and receive software and feature updates, 100MBs of video storage for video mail, outgoing messages, and store/forward video that can be uploaded to YouTube, Facebook, etc.  
 

Compatibility and Interoperability
The system is not compatible with Cisco's commercial telepresence offerings or standards-based videoconferencing endpoints but is compatible with Google video chat.  Google Chat connects road warriors back to home base to talk to the kids and connects umi users to friends who haven't yet dropped $599 for a umi themselves. Cisco indicates that compatibility with their commercial telepresence offerings is on the horizon but offers no specific timeline.  

 
Directory and GUI

Users set up calling circles where they create a directory of friends and family members who must provide their umi number to be able to initiative a call to them. There is no way to browse a directory of users or participate in anything resembling "Chatroulette".  Users can both record an outgoing video answering machine message that video callers receive when you are away/unavailable and callers can leave videomail messages.  In addition, umi will also record videos capable of being uploaded to Facebook and YouTube, or attached in an e-mail message.

There is no initial capabilities for "Yellow Pages", social directories based on interest, or other ways to connect with video users other than, essentially, one-on-one video with  

Privacy
Umi has the ability to block unwanted callers and the system can be locked so that others can't use it in your absence. There's also a privacy shutter that clicks off the camera and users have the ability to answer in audio-only mode.

Pricing & Availability
As analysts predicted, the hardware alone will cost $599, with a $24.99 monthly service fee. Cisco will make umi available on November 14 at Best Buy, with preorders beginning today. The hardware components will also be available at Magnolia Home theater including installation by the Geek Squad. In addition, Cisco and Verizon will bring Umi to Verizon Fios fiber-optic network customers early in 2011 in a bundled service that will add the monthly umi charges to the customers Verizon fios bill.  No word on whether Verizon will bundle and/or support the $599 hardware cost the same way the company has bundled/supported the cost of set top boxes and DVRs in the past.


Telepresence Options Publisher Howard S. Lichtman's
Thoughts and Analysis


Well... Here comes the the first real full-scale push towards high-quality home video calls with a high definition experience and a national, and ultimately, international marketing effort around getting consumers to adopt what is a relatively expensive and limited, albeit, high-quality platform.

Pros:

High Quality Experience -  While I haven't yet had a chance to try umi out yet, I have spoken to two different Cisco employees who have been in the beta program and both appear sincere in their description of the umi as a high-quality, high-definition video experience.   I have been told the GUI is excellent, the system is easy-to-use, and that set up is a snap. There is definitely a market for a high-quality, easy-to-use video calling and this appears to deliver as advertised.

The Television as the Display - While there have been other attempts to create a consumer videophone the overwhelming majority have been built around a telephone, a handset, or a PC.  This is the first major platform to leverage the growing number of large screen, high-definition television sets that more and more Americans have in their homes.  A large screen (50+ inch) display, properly positioned with good lighting and acoustics can create a dramatically better experience than any previous effort at consumer video calling and, I believe, will frankly amaze consumers when they see it in stores.
 

Cons

Cost - $599 upfront & $300 per year is steep in the middle of an inflationary "double dip recession" with the Labor department reporting that middle class Americans have cut their discretionary spending dramatically. I believe it will be somewhat crucial for Verizon and other service providers to bundle and price-support the gear the same way they did for the DVR if Cisco is to have any hope of priming the pump for Metcalfe's Law / Reed's Law growth. On the investor call Cisco positioned this as a "premium product" which it is... especially compared to the currently dominant consumer video calling price model: Free.  

Limited Capabilities - I don't want to whack Cisco too hard for what is Version 1.0 but lack of interoperability with Cisco enterprise telepresence is somewhat odd and lack of interoperability with standards-based videoconferencing systems and no multi-point capabilities is limiting as well. If Cisco and Verizon really wanted to empower the Internet generation then let's flip on IP multicast or other delivery mechanism for one-to-many distribution so that everyone could have their own HD television channel: The ultimate "Human Network".      

Other Random Thoughts

Cisco is positioning Version 1.0 as a pure consumer play and, in the conference call for investors, specifically mentioned that they have a line of high-quality, low-cost traditional videoconferencing endpoints that are specifically tailored to this market.  I see this as ultimately limiting the speed of adoption as SOHO users and the work-from-home-employees of Cisco TelePresence equipped enterprise customers would have been the natural initial customers.  I think the existing Cisco TelePresence eco-system would have adopted quickly with many companies completely picking up the tab to cost-effectively connect their remote employees.  While $599 upfront/$300 per year is steep for consumers it is a bargain for many companies to connect their knowledge workers together and provides DR/Business Continuity capabilities to-boot (Think Snow-pocalypse & the Icelandic volcano as recent examples).  These initial business customers, using the system to talk with friends and family in off-hours, will ultimately drive demand considerably when Cisco rolls this out.
   

Who Loses?
Ultimately, the manufacturers, distributors, and resellers of low cost videoconferencing gear if they can't compete head to head against the Cisco marketing & distribution juggernaut on the consumer side. The lack of interoperability with traditional videoconferencing & multipoint buys these players a little time but should the interoperability and multipoint capabilities of umi improve then umi could dominate the market for SOHO and SME videoconferencing endpoints.   


Portals and Directories
The initial portal / Directory seems rather limited (trying not to knock them too much for V 1.0... really... :-)  but I really believe that this is going to be one of the keys to driving wide spread adoption.  You can read my thoughts below on how I think this market is ultimately going to play out and the capabilities and features that I believe will drive adoption.  

Here are some excerpts from an article that I wrote in January entitled:

Home Telepresence/Videoconferencing at CES: The Battle for the Living Room 


The Applications
To kick it off: Why would anyone want a videoconferencing capability in their television set??? Here is a view of the future applications that I believe will be the driving home telepresence and videoconferencing.  

- "The Grandma Channel" - Videochat with friends and relatives with grandparents being the "Killer App". Might as well go ahead and order a 65 inch screen for the dining room table. 
- Tele-work / Business Communications - The ability to work from home and still meet with colleagues, partners, customers and prospective customers globally. Provides a disaster recovery capability in the case of a public health emergency, terrorist attack, false flag terrorist attack, currency crisis, etc.
- Tele-health - Hospitals all over the world are already salivating over the prospect of billing insurance companies and govt health programs for services delivered over video.
- Tele-psychiatry - Should be huge... Especially here in Washington DC.
- Shopping - Some people like shopping just to interact with other human beings... now they don't even have to leave the lazy-boy! 
- Distance Learning - Attend MIT from the comfort of your couch (or get your associate degree in "Homeland Security" from DeVry).
- Broadcasting* - Could Alex Jones create his own network? *Some IP Multicast Required!
- Narrowcasting - Expect to be able to transmit that cute video of junior's first steps you captured on your Flip via store and forward to the rest of the family.
- Video Technical Support - "Ma'am... I can see your problem... The DVD/CD Drive is not a drink holder"  
- Videodating - Match.com meets Logan's Run / THX 1138.
- Unfortunately...Pornography - Web cam peep shows go high-def on the big screen.

  


Cisco CEO John Chambers Demonstrates Home TelePresence at CES



The Business Models & Opportunities

Hardware- Video Endpoints, Video Appliances, HD Cameras, etc. These have to be sold to end-users directly, bundled with service offerings (Think of the Tivo/DVR that came bundled with your cable subscription), or given away free with a services subscription.  We think the bundle will be king and the winners will those companies who can cost-effectively bundle a quality experience with the bandwidth and portal/directory needed to make videocalling easy, fun and useful. 

Software -
Free/"Freemium"/lowcost software-based video codecs are everywhere.  You can pick up a free video codec from Logititech when you buy one of their webcams, Google, Microsoft and Yahoo give em away for free, you can download a free codec from ooVoo, skype, Mirial, and 1/2 dozen other players that give you basic functionality for free with some charging extra for extras: multi-party calls, content sharing, higher resolution, etc. Since an eventual de-facto standard in inter-operability will ultimately emerge and it is hard to compete with "free" (and the bundled offerings of the television vendors, cable companies and carriers), we don't expect consumers to be paying for marginally better offerings. What customers will be paying for is capabilities which offer value.  Being able to reach traditional videoconferencing endpoints or public/private Cisco/Polycom telepresence suites, or portals/directories which provide value or a business opportunity will pull consumers to one service vs. another.

Network & Portal Access - Providing crystal clear high definition video calls requires at bare minimum of about 1MB per second of symmetrical QoS bandwidth.  Depending on how multi-point calling and data collaboration are delivered that figure can double, triple, or more. We see business users potentially paying a premium for high quality videocalling services and applications.  Video chat with friends might be free/low cost but connecting to traditional videoconferencing endpoints or public/private telepresence systems will be business class services that you might be paying for.   Expect Verizon Fios, Comcast, Time Warner Cable, and other FTTH / Cable providers to be the big players in this space and I wouldn't be surprised to see a surcharge for symmetrical QoS bandwidth.  While I was researching this article I asked Dr. Jonathan Rosenberg, the Chief Technology Strategist for Skype if they were going to be partnering with the network providers for guaranteed QoS connections.  He started to explain to me how network quality on general purpose broadband and cable connections was good enough when he had a network issue and his Skype call was dropped.  The company's PR manager who was still connected re-dialed him on his cell phone.  
 
Portals / Directories - Here is where we see the real revenue opportunities for niche players.  Just having the theoretical capability to call someone does not make a particular application useful and/or desirable.  Being able to aggregate eye-balls (and cameras) into useful communities of users willing to pay good money for the privilege is where the entrepreneurial money will be made.  We expect the network providers and technology vendors to duel a bit on who owns the portal/directory and the associated revenue but something similar to the app store model for iPhones and television apps will likely emerge.    What is going to be Hot? Video dating portals, hiring/job interviews, consulting / software development (onshore/offshore) aggregators, distance learning and tutoring, shopping, social networking, tele-health,  gaming, and unfortunately pornography.   Expect partnership deals with established brands seeking to differentiate themselves by connecting with consumers in a more intimate way.   

Video Call Centers - As more and more consumers have high quality video calling capabilities in their TeeVees and computers expect more and more businesses to address that market in a differentiated way. We expect to see this on higher ticket items initially where perceived trust is a factor and the high cost of the product and service justifies the expense of setting up a call center: insurance, real estate, private client wealth management, personal electronics and high end retail will probably typify the early adopters.      

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Powwwow @ Home - We've Seen Home Telepresence Coming for A While.


Consumer Sales and Home Theater Integration - Is video delivered to a standard television set telepresence? Nope!  but it could be!  I expect that a market will develop on the high end for integration of video into home theater environments to more closely match the human factors of participants especially for folks who are using the systems for business.  In Powwow Virtual, our business model for a global network of public telepresence conferencing centers we include a retail area to promote home telepresence and videoconferencing, a demonstration capability to show it elegantly integrated into a home theater environment, and a design and installation practice to artfully integrate it into client homes to create the most life-like experiences possible.  

 


The Players & Platforms

Cisco

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Cisco has a heavy investment in telepresence and videoconferencing including their recent $3.4 Billion dollar acquisition of videoconferencing maker TANDBERG.  The company announced that "home telepresence" will enter US field trials in the spring with Verizon and in France with France Telecom. The company has previous estimated the cost of home telepresence at $500.    

Technology Platform(s): Cisco has developed their own H.264 video codec for Cisco TelePresence and they have recently acquired videoconferencing equipment vendor TANDBERG with their own standards-based videoconferencing codecs. The company owns set-top box manufacturer Scientific Atlanta and Hong Kong-based set top box manufacturer KVM which has a strong presence in China making the set top box the prime platform for the assault on the home.  The first trials will use a stand alone appliance.  
Partners: Verizon, France Telecom
Official Announcement: Cisco Press Release

Polycom / IBM

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Polycom and IBM were demonstrating "home telepresence" which has been reported as Polycom's HDX videoconferencing packaged for deployments in the home and based on IBM and Philip's "Net TV" offerings in Europe with a prototype HD conferencing solution accessible via one of their widgets.  IBM will be providing the backend video network infrastructure in the cloud. 

Technology Platform(s): Polycom Videoconferencing Endpoints, Appliance, and software codecs
Partners: IBM
 

Skype

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Skype announced they have partnered with LG and Panasonic to deliver HD videoconferencing to television sets.  Other partners include In Store Solutions and FaceVsion which will be providing HD video cameras with microphone arrays specially designed for Skype. The company is now shipping an HD version of its video codec with the latest release of Skype which requires an HD camera and beefy processor.  The company claims 520MM registered users with 34% of calls using video today and up to 50% of calls using video on holidays.   

Technology Platforms: Internet-Enabled HD Television Sets so far including Panasonic TVs and 26 different LG HD TVs that will be launched this year.  Panasonic also officially launched an HD videoconferencing platform the KX-VC500 which we assume will be skype enabled but have not yet confirmed.
Partners: LG, Panasonic

Other Potential Players

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So now that Cisco/Verizon/France Telecom, Polycom/IBM, and Skype/Panasonic/LG are moving into the space who are the other players and potential entrants? 

Logitech/LifeSize Communications
- We described the potential of Logitech/LifeSize in November Here. The executive summary: The world's largest manufacturer of webcams with global distribution and an existing and capable freemium videoconferencing package with more capabilities from LifeSize on the way.

Vidyo - Intel's CEO Paul Otellini demonstrated videoconferencing over a smart phone during his CES keynote and used Vidyo's SVC codec to do it.  Vidyo is also the video engine in Google chat and, along with Polycom and IP-V Gateways, my pick(s) for the company(ies) most likely to get acquired in 2010.

ooVoo -  One of the leading standalone providers of consumer videoconferencing.  The company also operates a "freemium" model with the ability to download and use its software based codec for free with limited capabilities with the ability to upgrade to a premium version for free.

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Vizio's Television Remote Control of the Future... Today!


Vizio - The television manufacturer with the Wal-mart distribution partnership already has multiple television sets enabled with wi-fi and the ability to integrate internet apps that do everything from provide streaming weather updates to access your Facebook account.  The company has 25+ apps right now and predicts hundreds by the end of 2010.  Could one of those be videoconferencing? 

Microsoft - Last year the company announced that TANDBERG had developed a transcoder for MS's Real Time Video to H.264 at HD quality.  The company has a consumer videoconferencing capability in Windows Live Messenger and their hardware division has released a 720p HD webcam called the LifeCam Cinema. The company also has two different platforms that integrate television with computing: Windows Media Center and Mediaroom.


Apple - Apple has its iChat videoconferencing client and is rumored to be rolling out a mobile version with its rumored soon to be released tablet PC that is rumored to be called the iPad.  The company has filed a patent application on a method of hiding a camera behind the screen of a laptop (and tv?) which would improve eye-line for videoconferencing as well as a patent application on a head tracking display that could be used for videoconferencing as well.    


  

About the Author

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Howard Lichtman is the President of the Human Productivity Lab, an independent consultancy focused on telepresence and effective visual collaboration for organizations looking to improve productivity and reduce costs.  The Lab provides corporate clients with acquisition consulting, RFI/RFP creation, and ROI/TCO financial modeling on telepresence systems, telepresence managed services, and inter-networking telepresence. The Lab also provides investors with prescient insight into the rapidly growing telepresence industry.  Mr. Lichtman is also the publisher of Telepresence Options, the #1 website on the internet covering telepresence technologies and the Editor of the Telepresence Options Telegraph.

You can see Howard speak on the future of telepresence and visual collaboration on October 21st at the Immersive Technology Summit in Los Angeles and the same day he will be appearing virtually at the SYNNEX Focus Conference in San Francisco via the magic of telepresence.







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