Cisco’s Big Bet on Consumer Telepresence

The video phone holds an iconic place in the American technology lore. From black and white movies to Jetsons’ cartoons, many of us were exposed early on to a futuristic vision of talking to far-flung friends and family through a video display.

So when comb-over billionaire Donald Trump introduced a video phone as the centerpiece product on an episode of “Celebrity Apprentice” last spring, I realized we’d entered a new age. With the Donald introducing a video phone on prime time TV, there was no doubt video communication had gone from futuristic vision to mainstream reality.

But unfortunately for the Donald and ACN (the maker of the Iris 3000 videophone), while consumers have embraced visual communication in the last few years, it hasn’t been with video phones. Instead, most consumers video chatting today do it on a computer using an integrated webcam and popular software like Skype.

Given this reality, is it far-fetched to start thinking about visual communication on the living room TV?  If you ask Cisco’s John Chambers, the answer would be no.

Going back as far as two years ago, Chambers started talking in public about the idea of consumer telepresence.  While the idea of high-priced Cisco telepresence systems in the home seems far-fetched today, back then it seemed almost unfathomable, given that the typical installation was in the $300,000 or so range.

Fast forward two years, and with prices dropping fast and sales doubling year over year on Cisco’s enterprise systems, the networking giant turbocharged its entry into consumer telepresence with the acquisition of Pure Digital.

There’s no doubt Pure helped reshape consumer home video market with its easy-to-use devices, but is it a fantasy to think that something as simple as adding cheap camcorders to the mix would make Jetson-like videocalls on our HDTVs possible?

Certainly, cheap video capture equipment is a big part of the equation, but big challenges remain before Chambers’ vision of widespread consumer adoption becomes reality. The big ones are:

  • Real-time Encoding. The biggest hurdle is creating low-cost consumer hardware that can enable both high quality capture and the necessary encoding required to push the video up the sodastraw that today is most upstream broadband speeds.
  • Well thought out service and hardware bundling.  With free or near-free alternatives like Skype video chat, consumer telepresence must be affordable enough to compete with low-cost alternatives, which means avoiding big upfront investments required in hardware through subsidization packaged with affordable monthly service bundles.
  • Market awareness.  High-quality HD video communication is really a seeing-is-believing type of application, but to seed the market with early evangelists, Cisco and others must get telepresence out to early adopters to show friends and start the word-of-mouth viral marketing.

While it’s unclear how soon before Chambers’ vision comes true, there’s no doubt that Cisco is betting big time that its vision for consumer visual communication trumps that of Trump.

Question of the week

Will consumer telepresence ever reach the same level of adoption as cheap webcam videocalls?
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9 Comments Subscribers to comment
  1. Tsahi Levent-Levi Thursday, April 22, 2010

    Doing two-way realtime video is hard as hell – especially doing it in HD, which is what is expected if you talk about “consumer telepresence” (or simply living room TVs).
    I’ve been writing a lot about the subject of how you design and develop the relevant hardware for it:
    It is not only the real time encoding involved, but the whole shabang of having to deal with the amount of processing power, audio requirements in the living room, multiple video streams and other tasks.

  2. Andrew Hansen Monday, August 17, 2009

    *corr. if they think consumers ‘will’ pay for this service..

  3. Andrew Hansen Monday, August 17, 2009

    ^^^Out of the Box network capable TV’s and inexpensive set top boxes are they key to ubiquitous ‘in home’ telepresence. If I can run (or my TV runs) Skype in my living room with a 2-click installation process, why wouldn’t I?^^^

    Cisco is barking up the wrong tree if they think consumers won’t pay for this service, but they will use it if presented in the right hardware package.

    1. @Andrew – I think that you are right, if we could get easy-to-use Skype video chat on a TV screen, that would be a runaway hit. If I were Microsoft or even Roku, I’d be looking to get that done as soon as possible on my box.

      That being said, telepresence is dramatically different in quality terms, and that is what Cisco is betting on. Video chat on a PC screen through Skype is pretty low quality, I couldn’t imagine it on a 42″ HDTV. Telepresence quality would be much closer to that DVD quality, both in terms of video and audio. The million dollar question for Cisco (and their service provider partners who will be a part of a bundled service offering) is whether the consumer will pay for that.

      My feeling is the mass market would go for a decent quality, free or nearly free, Skype service integrated on a game console or similar box like a Blu-ray player. There are those that would go for Telepresence, however, if its as visually differentiated as enterprise telepresence is from video conferencing today.

  4. @Devin – I think you hit it right – those consumers with the pocketbook for consumer telepresence are laggards if we slice up the traditional adoption curve, so this whole idea needs to be packaged right, managed, as well as properly shown to the crowd who will use it.

    Consumer telepresence feels like a mix of a CEDIA sell to me as well as a potential high-end service provider sell, but the problem for me with that is the two channels are not a good fit for one another.

    I think Cisco’s goal is to get the hardware with a service bundle to where the service providers can sell this as a package. My gut tells me the pitch will be in the area of $200-$400 a month type of service with a two year contract, heavy hardware subsidization. But I could be completely off :)

    1. but the problem for me with that is the two channels are not a good fit for one another

      Agreed, I’m more interested in what portable (or desktop) devices Cisco + Linksys + Pure can put together and stick in our homes or offices. That’s compelling to me…

  5. I think the Pure Digitial acquisition is a step in the right direction, bandwidth and hardware can come fairly easily. The biggest issue is the market, and a lot of the targeted consumers are obviously on the back end of the adoption curve… which is likely why they’re just now beginning to use Skype.

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