Cisco Systems Inc. is preparing a consumer version of the high-end video-conferencing technology it sells to companies, moving into a market dominated by cheap webcams and free services like Skype.
The system, which includes a video camera and a device that connects users’ high-definition TVs to the Internet, will be priced at $600 and require a $30 monthly subscription fee, a person briefed on the matter said. Cisco is expected to announce the product at a news conference the company has called for next Wednesday.
Cisco’s move comes as the maker of networking gear increases its focus on video, which the company says will be major driver of Internet traffic in coming years. The San Jose, Calif., company is also moving to raise its profile among consumers, now a sideline compared to its core business serving corporations and telecommunications carriers.
A Cisco spokesman declined to comment on the upcoming announcement.
Cisco has been trying to woo companies with conferencing-room setups it markets under the term “telepresence,” to indicate the realism of the experience. It has also been using acquisitions to beef up its capabilities in the field.
The company recently spent $3.3 billion to buy Norway-based conferencing specialist Tandberg ASA, and $590 million for Pure Digital Technologies Inc., maker of the Flip camcorder. In August, Cisco said it would acquire ExtendMedia Corp., a maker of software that allows media companies to send video to computers and mobile devices, for an undisclosed amount.
Cisco executives have previously said the company would offer a consumer telepresence product. In doing so, industry analysts say, Cisco enters an arena dominated by inexpensive webcams attached to laptops and desktop computers, and free Internet-calling services that include video, such as Skype SA.
But interest in more sophisticated video-conferencing systems for consumers is growing, analysts add. Earlier this year, Panasonic Corp., LG Electronics and Samsung Electronics Co. announced plans to integrate Skype’s software into their flat-panel TVs.
Hewlett-Packard Co., which also markets telepresence-style systems, is in discussions with a manufacturer to offer a device for home video conferencing, a person briefed on the matter said. An H-P spokeswoman declined to comment.
Elliot Gold, an analyst with the research firm TeleSpan Publishing, notes that telecommunications companies like AT&T Inc. have discussed video-conferencing services for consumers since the 1960s. But high-quality images require so much communications bandwidth that such services were relegated to business users, he said.
Now, as home broadband connections become more affordable and ubiquitous and the price of high-definition TVs and video hardware drops, “all the planets are lined up” for home video-conferencing, Mr. Gold says. “It’s a completely different environment in the home today.”
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