With the popularization of Skype, Oovoo, and iChat, video chat has become an increasingly popular and easy way to communicate with people worldwide. Cisco Systems, which makes videoconferencing for businesses around the world, has announced the release of their home videoconferencing system. The system, which will be sold for $599, will also have a monthly subscription of $24.99 per month. This home videoconference system will be in direct competition with Skype, as well as Logitech’s newly released Google Inc. TV, which allows users to make video calls through a webcam hooked up to their TV.
The introduction of this home videoconferencing system is a good move by Cisco. At 1:31 on October 6th, Cisco’s stock rose 18 cents, the first rise in price in the last year. It was no coincidence that the home videoconferencing system was announced today. Cisco has added more consumer friendly industries in the past couple of years, adding Scientific Atlanta and Pure Digital, which produce TV cable boxes and Flip video cameras, respectively.
I think that this is a great idea by Cisco. Their videoconferencing systems for businesses have been widely used and are very practical. The idea to bring this into people’s homes is brilliant. More and more people are using video to keep in contact with family and friends that are spread out across the country and the globe. It will also help boost business for Cisco in the Internet control industry. Cisco is one of the largest manufacturers of routers and switches, and the home videoconferencing system would increase the need and use of these devices. This will inevitably create more revenue for Cisco.
One of the problems with it is the immediate practicality. Paying Six Hundred dollars for the system, along with the Twenty-Five dollar-a-month subscription price seems pricy to communicate with a small market. Very few people are going to be willing to spend this kind of money when they are still able to use Skype for a much lower cost.
Another potential problem is this. Who are the Cisco users going to be able to call? Obviously, they will be able to call from Cisco device to Cisco device, but are they going to be able to call computers using other platforms? Hopefully, people will be able to use the systems that are set up in their living rooms to call computers and other media, like the Apple iPhone 4, which has a camera that can be used to hold video calls.
I think that Cisco faces some initial obstacles for their system. Competing with Skype will provide some problems, as anyone can download Skype for free and place a call for very cheap or free. However, Cisco will definitely have the edge on providing better quality. I am just surprised that Apple hasn’t begun to develop some sort of high quality videoconference system. While they do provide the service through iChat, don’t be surprised to see Apple enter the video chat industry on a higher level sometime soon.
-Jason Gibbons
Check out the article here:
http://www.businessweek.com/news/2010-10-06/cisco-unveils-599-videoconferencing-for-consumers.html
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