The details of Cisco's umi telepresence solution are available according to TMCnet articles by Beecher Tuttle and and Professor Mary Cronin and as I fly cross country the sinus pressure in my head caused by a prolonged cold is exacerbated by thoughts on why Cisco is making a mistake with its new umi home telepresence solution.
Of course whenever new technologies come out no one knows for sure what will happen but these are the reasons I believe this solution will fail.
1) Skype. Elaboration would be talking (writing) down to you.
2) Cisco's solution at $599 for the equipment and $24.99 per month is insane for a new consumer technology which has little to no network effect related to Metcalfe's Law. Oh and you need 3.5 Mbps upload speed for 1080p calls - meaning higher broadband bills for some.
3) Facetime: Apple's Facetime is free and even though at the recent ITEXPO many people commented that using the software on an iPhone 4 is not great because inevitably your hand gets tired and falls to your stomach causing a nose-hair view of yourself to be transmitted - we can expect Apple to Facetime-enable everything they sell. Will umi interoperate? If not, how will it compete?
4) Vidtel: Scott Wharton is a VoIP veteran - he was an integral part of VocalTec and Broadsoft - and few people have more experience in telecom and specifically IP communications. Still, he launched Vidtel as a consumer video Vonage replacement (my description) and even hired some of the people integral in getting Vonage to become a major VoIP player. What Scott found is that it is tough to compete with Skype at under $30 a month. Now the company has moved upmarket to the SMB space which could mean umi will have the same fate.
4) Cisco doesn't do consumer well. This was first pointed out as far as I know by Om Malik who crunched numbers. Having said that, we have seen incremental improvements in Flip video devices and I have to admit I love mine. High-end Linksys APs like the E3000 on the other hand while gorgeous in design have split personalities requiring configuration to be performed partially via PC software and also web interface and if you change your SSID the software doesn’t work correctly. For a company with world-class collaboration solutions at its disposal it seems the Linksys development team was only allowed to use tin cans but no string.
5) Assuming this is a killer device and service - it is competing for holiday budgets with new video game solutions which bring tremendous full-body interactivity to the home like xBox Kinect which I love. Kids, which do you want this Christmas, a new video game system or a way to see grandma with more clarity than Skype. This will turn out to be as dumb a question as "Do you want to go out and play or stay indoors all day in front of that screen?"
6) Apple: We mentioned Facetime above but Apple in general is selling products and services we didn't think we need but can't help ourselves from buying. As you may recall the global consumer isn't doing too well and the White House, Senate and Congress are becoming experts at keeping it that way. Let’s see, what do I need when I am out and about? Music player? Check. Phone? Check. Tablet? Check. Laptop? Check. File server? Check? Mobile Me? Check. You get the idea.
7) Android: Android sucked when it was launched but in the amount of time it took Microsoft to kill its mobile strategy due to incompetence, Google took a crap UI and has made it much better thanks to copying many Apple design ideas. Eventually Android tablets will flood the market - I saw some prototypes at ITEXPO this week in the $129 range - 7 inch tablets with video cameras. Impressive.
8) Google TV - Apple TV, Netflix - whatever it is, its getting better and it is unclear how consumer budgets will open wide enough for this solution to get critical mass.
9) Like them or not - cable companies are raising prices and again - same budget.
10) Uncool: Cisco is not cool. One of their more recent product launches is amazing collaboration solution Quad – with a UI I said is almost as slick as something Apple would design. But sorry - the company is old and stodgy - you know like - me.
Now don't get me wrong, it is possible Cisco can take all of the above problems and more and ram this thing through by marketing it like crazy, getting Oprah to give them away, featuring them on every TV show in the world, etc. But in the end, Cisco will likely realize this solution is being used by SMBs - to the regret of many Tandberg employees who will be wondering how to get the "left hand" and "right hand" on Quad.
Check out this video interview with Thomas Howe who discusses a similar solution to umi based on Skype.