* Cisco broadens tablet lineup with upgraded Cius
* Aiming to make inroads in corporate technology market
* Critics say tablet "unnecessary sideshow" for Cisco
By Nicola Leske
Dec 2 Cisco Systems Inc (CSCO.O) is stepping
up its push to sell its Cius tablet computers to corporate
customers, defying skeptics who say the product is short of the
sex appeal and brand recognition it would need to win over the
In a sign of its confidence, Cisco says it will soon
introduce a 4G version of the Cius, an upgrade to the 7-inch
tablet computer that it began shipping to corporate customers
in August. Cius, which plugs into a phone docking station, is
built on Google Inc's (GOOG.O) Android operating software.
Whether Cisco's confidence is misplaced remains to be seen.
By most accounts, it faces a number of challenges when it comes
to selling Cius, not the least of which is that few people seem
familiar with the brand.
Chuck Fontana, Cisco's head of product management,
acknowledged that "people hardly know it exists because you
can't get it at Best Buy, but this is not a device you get for
Even with better brand recognition, there is a question of
whether it has come too late to a market currently dominated by
Apple Inc's (AAPL.O) iPad, which is both bigger and lighter
than the Cius.
Still, Cisco, a network equipment maker, contends that Cius
will appeal to corporations because of its advanced security
options and features that allow customers to manage data or
erase sensitive corporate documents remotely.
Cisco can also point to a handful of other appealing
details: The Cius offers advanced video conferencing and
functions as a phone on-the-go, while giving users access to
games and media.
Cisco declined to say how many tablets it has sold so far
but said about a thousand company customers have begun using
Cius in the last three months. Among them, healthcare group
Kaiser Permanente has been using Cius, and South African
telecom company MTN (MTNJ.J) is rolling it out to its
workforce, Fontana said.
For the new 4G version, Cisco has partnered with AT&T Inc
(T.N) and next spring it plans to offer a Verizon Wireless
(V.N) enabled version and more models with different screen
"You're always late in tech," said Fontana. "But this is
FREEDOM OF DEVICE
There are doubts, however, that Cius can win over
corporations in a world where employees increasingly want to
bring a device of their choice to work.
"We can see that Cisco believes enterprise communication is
evolving toward tablets, but find it hard to believe that most
people will end up using Cisco tablets for that purpose," J.P.
Morgan analyst Rod Hall said in a note.
Carolina Milanesi of Gartner research agreed. "As an
employee you want a tablet that was created as a tablet, one
that's sexy not one that's coming from desk phones."
Traditionally, employees have expected to have little say
when it comes to technology they use in the workplace. That is
changing, according to research that shows the freedom to
choose devices is becoming key factor in job satisfaction.
Some 40 percent of college students and 45 percent of young
professionals would choose a lower paying job if it allowed
device flexibility, among other things, over a higher paying
job, a recent study published by Cisco itself showed.
Gartner's Milanesi said that Cisco could potentially manage
to corner a small part of the tablet market but that she was
not sold on its approach.
"We are not great believers in a tablet as a phone to take
with you," she said, adding that among the 58 million to 60
million tablets estimated to be shipped this year the Cius was
"really a drop in the ocean".
Cisco isn't the only one betting -- rightly or wrongly --
on demand for a business-specific tablet.
Research in Motion Ltd. RIM.TO launched the Blackberry
Playbook but has had disappointing sales. Hewlett Packard's
(HPQ.N) Slate and Dell Inc's DELL.O Latitude, both of which
run Windows 7, are also entrants in the market. But they are
geared more towards healthcare, education or retail workers who
need a mobile device for charts or payments.
Next year Microsoft Corp (MSFT.O) is expected to launch a
"My concern with anyone targeting a niche market is that
consumer tablets are going to be good enough to target any
sector ... if you want to do anything in the enterprise you're
going to have to have a lot of pluses," Milanesi said.
It makes some sense for Cisco to try to succeed in the
tablet market, Milanesi said, but sticking to the software
route may be better.
"We like most of Cisco's other initiatives lately but find
the continued development of tablets an unnecessary sideshow to
the real business of protecting and growing the switching and
routing businesses". J.P. Morgan's Hall said.
(Editing by Paul Thomasch; Editing by Gary Hill)
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