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?