Please ensure Javascript is enabled for purposes of website accessibility

That's Just Dumb, Cisco

By Rick Munarriz – Updated Apr 6, 2017 at 11:13AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Cisco's new consumer videoconferencing platform is a joke. 

If you've ever dreamed of The Jetsons' video teleconferencing vision of the future, have deep pockets, and have somehow slept through the past several years, has Cisco (Nasdaq: CSCO) got a gadget for you!

Cisco unveiled the Umi Telepresence yesterday, the enterprise networking giant's first push into consumer videoconferencing.

It's a neat product, but the Umi will gain zero traction because of a stiff price tag that would even make Rosie the robotic maid blush.

Yes, HD video calling on existing high-def televisions is cool. The Umi's spec sheet is impressive. However, there aren't too many people who will line up to pay $600 for the device -- much less the $25 a month subscription required to actually use the thing.

Rip van Winkle may be jumping for joy, but those of us who haven't dozed off over the past few years are right to be skeptical. $25 a month for unlimited Umi calls, video messaging, and video storage isn't much of a deal after forking over $600 for the system itself.

They may not be HD, but Google (Nasdaq: GOOG) and Apple (Nasdaq: AAPL) offer wi-fi video chat platforms for free. In a fitting "in your face" coup, Logitech (Nasdaq: LOGI) trumped Cisco's announcement several hours later. Buy a $300 Logitech Revue powered by Google TV, and a $150 Logitech TV Cam, and you can be videoconferencing in high-def without the monthly bills.

Cisco will still try to nab the stupid. The Umi will be marketed through Best Buy (NYSE: BBY). It's going to get some serious exposure on Oprah Winfrey's show. A mall tour kicks off next month, providing live demonstrations. The Umi will be actively marketed to Verizon's (NYSE: VZ) FiOS customers.

It's still going to flop, adult industry usage notwithstanding.

After all, if $600 up front and $300 a year seems outlandish, ask yourself who you're going to call? If you want to visually chat up your parents or grandchildren in high-def, you'll need two Umi systems and subscriptions. Sure, the system can also suboptimally work with Google video chat, but other interoperability is sorely lacking. How many people will keep the network effect going? How many will buy this thing, find that they couldn't hoodwink anyone else into signing up, and make a beeline to the Best Buy return counter?

This will be a textbook case of subtraction by multiplication.

Nice try, Cisco. An angry Mr. Spacely will see you now.

Is Rick wrong? Does the Cisco Umi have a shot? Share your thoughts in the comment box below.

Best Buy and Google are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Apple and Best Buy are Motley Fool Stock Advisor picks. Logitech International SA is a Motley Fool Hidden Gems pick. The Fool has written calls (Bull Call Spread) on Cisco Systems. Motley Fool Options has recommended buying calls on Best Buy. Motley Fool Options has recommended a write covered strangle position on Logitech International SA. The Fool owns shares of Apple, Best Buy, Google, and Logitech International SA. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.

Longtime Fool contributor Rick Munarrizthinks that some calls are better off heard and not seen. He does not own shares in any of the stocks in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy, and it has no problem video calling you in the buff.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
$95.65 (-1.82%) $-1.77
Apple Inc. Stock Quote
Apple Inc.
$138.20 (-3.00%) $-4.28
Best Buy Co., Inc. Stock Quote
Best Buy Co., Inc.
$63.34 (-2.67%) $-1.74
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$37.97 (-1.73%) $0.67
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
$40.00 (-1.41%) $0.57
Logitech International SA Stock Quote
Logitech International SA
$46.00 (-0.56%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.