Cisco shelves home telepresence amid company revamp

Wed Jan 4, 2012 6:56pm EST

The Cisco logo is displayed at the technology company's campus in San Jose, California February 3, 2010. REUTERS/Robert Galbraith

The Cisco logo is displayed at the technology company's campus in San Jose, California February 3, 2010.

Credit: Reuters/Robert Galbraith

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(Reuters) - Network equipment maker Cisco Systems has decided to pull the plug on umi, a home video conferencing system it once touted as a quality alternative to popular video chat service Skype -- as it continues with its restructuring plans.

The San Jose, California-based company kicked off a months-long overhaul last year that has included layoffs and asset sales.

Cisco said in an email on Wednesday in response to blogs that it had decided to no longer sell Cisco umi hardware as a consumer offering. In April Cisco said it would shut down its popular Flip video camera division as part of a larger revamp.

As of Wednesday afternoon, Cisco had yet to remove the product from its home product store, where interested customers were told only that the product was currently not available for shipment.

Just a little more than two months ago, Cisco announced that the umi system would be available in Best Buy's Magnolia Home Theaters in time for the holiday shopping season.

"While we are ending the sale of umi, the umi service remains unchanged," Cisco said, adding that existing customers will continue to be able to use the service to make calls to other umi subscribers or to Google video chat accounts.

Some users worried what the decision would mean for them.

"Let's hope they make them Tandberg compatible. I have 7 units I use in a mental health agency for a variety of purposes," a user by the name of umi Rumford said on Cisco's umi chat forum, referring to Norwegian video-conferencing company Tandberg, a business acquired by Cisco in 2010.

"The new year is only four days old, and already another consumer product from Cisco Systems has been put out to pasture: This time, it's the consumer videoconferencing product umi," that person also said.

Cisco had launched the $599 umi home videoconference system in October 2010 as a high-quality rival to Skype and other low-cost providers, hoping to expand in the consumer market.

Marthin De Beer, head of Cisco's emerging technologies business group, said at the time umi's quality made it different from others.

"It is different, it's a new class of product and you will see that the experience is transformational," he said at the time of the launch.

Cisco declined to give sales figures for the umi system.

Videoconference start-up Vidyo, which unveiled a new technology in November that allowed its service to run using virtual servers, said the Cisco decision confirmed the trend in the industry away from hardware and toward software.

"The only way to introduce new services is through solutions

that work on devices people already own such as smart phones and tablets," Vidyo Chief Executive Ofer Shapiro said.

Rival Skype pointed to a blog on its site written at the launch of umi and said the blog was still valid.

Skype said at the time that a $599 device could be "subject to obsoletism at the hands of mass-market options."

(Reporting By Nicola Leske in New York, additional reporting by Tarmo Virki in Helsinki; Editing by Steve Orlofsky)

(This story corrects paragraph four, which should read, "As of Wednesday afternoon ...")

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