Cisco pulls another Flip, stops selling Umi telepresence units

Cisco’s (s csco) move into living room video conferencing with its Umi product never got going, hampered by a high price and competition from free alternatives like Skype. Now Cisco has confirmed that it is no longer selling the consumer telepresence gear, though it will continue to support existing users.
The decision comes after Cisco killed off its Flip line of video cameras in April, part of a big restructuring as the company began focusing more on its core strengths. At the time, Cisco said it would move Umi into the business Telepresence line and sell it through an enterprise and service provider go-to-market model. That signaled the beginning of the end for Umi. Cisco actually stopped selling the devices last month, and retailer Best Buy (s bby) has recently been heavily discounting units to move them.
“While we are ending the sale of Umi, the Umi service remains unchanged,” a Cisco spokesperson said in an email to CRN. “Existing customers will continue to be able to use the service to make calls to other Umi subscribers or to Google video chat accounts.”
It’s a further sign that Cisco is rethinking its consumer efforts, which have not paid off in the way the company had hoped. After Cisco killed off the Flip line, Cisco CEO John Chambers said the company would be focusing its consumer strategy on helping its enterprise and service-provider customers optimize and expand their offerings for consumers.
The failure of Umi is not much of a surprise. We called the $599 system a nonstarter when it launched in Oct. 2010, because its price put it out of reach of most consumers. It did offer 1080p video and integrated GTalk (s goog) video chat. But it came with a $25 monthly service charge, which was later reduced to $10 a month.
Umi, however, was competing with free alternatives like Skype, which is getting built into set-top boxes and TVs from Panasonic, Sony, Samsung and Vizio. And it was trying to sell stand-alone hardware in a market that was shifting toward devices that offer video chat as a feature. Also, it was generally pushing more of a closed proprietary system approach, something that works better when it’s incredibly usable, like Apple products.
By pulling back on Umi, Cisco can again focus on its core strengths in networking. In a memo to employees in April, Chambers explained that the company was focusing on five areas: core routing and switching, collaboration, cloud computing, network architectures, and video, which apparently doesn’t mean Flip or Umi. Dropping Umi also provides the benefit of not having to worry about Umi’s cannibalizing sales of Cisco’s existing enterprise conferencing systems. Umi was interoperable with Cisco’s Telepresence suite and may have been a tempting alternative to the bigger video conferencing setups.
Cisco still has a foot in the consumer market with its Linksys routers, and it continues to sell set-top boxes, but it is showing that its future is headed toward what made it big in the first place. With data traffic exploding, thanks in part to incredible mobile growth, there is still a lot of opportunity in building smart networking gear if it can regain its focus.