Cisco Gives Flip a Bedfellow

Farewell, Umi. We hardly knew thee.

Cisco Systems (Nasdaq: CSCO  ) has made numerous missteps in consumer-oriented electronics pushes, like the botched acquisition of Pure Digital in 2009 for $590 million and its Flip camera. Instead of doing what any rational person would do and selling it to recoup some dollars, Cisco just outright killed Flip.

The networking giant has now decided to quietly kill another consumer-electronics offering, Umi. If you've never heard of Umi, it's probably because it was the most ill-conceived product that was allegedly geared toward consumers ever created. Umi was a consumer home videoconferencing system destined for the "average" consumer. Its biggest problem?

Its absurd price tag.

For $600, a three-piece set consisting of a camera, controller, and set-top box could be yours to videoconference in full HD 1080p to your heart's content. But wait -- there's more! You're also expected to fork over a $10-per-month service fee. It's also your responsibility to bring your own hi-def TV and Internet service, or BYOHDTV&IS.

As bad as it already sounds alone, we haven't even talked about competing alternatives.

For $0, you can use Skype, which Microsoft (Nasdaq: MSFT  ) gladly picked up to get into social media and is now even integrated with Facebook. Sure, $8.5 billion is an awful lot to pay for a free service, but it's cheap considering the pricelessness of illustrating how embarrassingly out of touch Cisco is with consumer products. Google (Nasdaq: GOOG  ) also offers a free video-chat alternative through Google+ Hangouts, hoping to take on the Skype/Facebook dynamic duo.

For $500, you can buy a brand new Apple (Nasdaq: AAPL  ) iPad 2, which has countless uses, including FaceTime with other Apple gadgets. You can even grab a smaller iPod Touch for $199 for the same purpose. Dell and Hewlett-Packard combined have dozens of computers with built-in cameras if you don't already have one to Skype with , many of which are cheaper than $600.

Here's some free advice, Cisco: When it comes to consumer products, stick to Linksys routers.

Don't forget to use our free Watchlist service to get the latest news and analysis. Start by adding Cisco Systems to your Watchlist to see if it ever gives up on consumer electronics.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple, Google, Cisco Systems, and Microsoft and has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Apple, Google, Microsoft, and Cisco Systems and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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