Cisco to launch $500 home TelePresence

SAN FRANCISCO Fri May 21, 2010 3:54am BST

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SAN FRANCISCO (Reuters) - Cisco Systems Inc (CSCO.O) is testing a consumer version of its TelePresence videoconferencing system and expects to begin selling the product late this year for around $500.

Cisco already sells high-end videoconferencing systems to businesses for as much as $300,000 per unit, and analysts have said its challenge would be to come up with a more affordable version.

"You would just plug it into your television," Robert Lloyd, Cisco's executive vice president overseeing worldwide operations, said of the consumer version.

"Probably the market would be looking at something like that in the $500 range," he told the Reuters Global Technology Summit in San Francisco on Thursday.

Technology companies have been trying to turn television sets into more interactive machines, hoping to win over Web surfers who are already migrating from personal computers to mobile devices.

Google Inc (GOOG.O), for example, on Thursday showed off its Web TV effort, aiming to add a search box -- like on Google's website -- to some Sony Corp-built (6758.T)(SNE.N) TVs this holiday season. The TV search box looks through live programs, DVR recordings and the Web, delivering a relatively compact list of results that can be accessed with a push of the button. Pricing was not available.

Some analysts said a $500 consumer TelePresence system is unlikely to win mass appeal for Cisco, given the plethora of lower-cost Web-based videochat services already in the market from the likes of Skype, Google and Apple Inc (AAPL.O).

"My $300 netbook has it. Five hundred dollars sounds like a boatload of money for that. Particularly since Google and Apple already has video chat," said Daniel Ernst, analyst at Hudson Square Research.

He said it shouldn't be too difficult to get Internet videochat services on to Web-connected television sets.

"All it takes is one teammate -- maybe Sony, maybe somebody else -- to throw it in there. Someone will write a $9.99 app to go with my $30 Logitech LOGN.VX camera," he said.

Lloyd, however, argued that TelePresence will offer consumers a better "virtual meeting" experience, thanks to high-definition video and Internet connection with low latency, or minimal delays.

He said a trial version will be delivered to his home later this month, and that Cisco was doing tests with other employees as well as partners.

"It's basically a box that would be in addition to a set-top box, that would leverage high quality broadband," he said, adding that the system would incorporate a high-definition camera and network technology to make video conversations smoother.

"I think you'll probably see some of the technology in the market at the end of the year, and then probably beginning to become a real issue in '11," Lloyd said.

The world's largest maker of routers and switches has been expanding into video and consumer products. Following its recent acquisition of Norway's Tandberg, it has become the top video conferencing equipment provider for business customers.

The corporate TelePresence suites are one of Cisco's fastest-growing products. Despite initial costs, the devices are helping companies cut back on travel expenses and many users say the high video and audio quality help make the on-screen interaction feel close to in-person meetings.

Lloyd said a consumer version could offer new opportunities, like better distance-learning classes.

"You want to go to an MBA class from home connected to a university offering extension services ... you'll get education just transforming itself," he said. "A whole bunch of universities are going to love us."

Cisco has been building up its consumer business through acquisitions as well as internal developments. Lloyd said Cisco would continue to be active in acquisitions in consumer and beyond, but would also look to other kinds of partnerships.

He cited Cisco's alliance with storage technology company EMC Corp (EMC.N) as an example of a partnership making more sense than an acquisition. When asked whether Cisco had looked to buy EMC, which investors have often speculated about, Lloyd said it had not.

(Additional reporting by Franklin Paul, Noel Randewich and Tiffany Wu; Editing by Gerald E. McCormick and Richard Chang)