Cisco Home Telepresence Announced at $599 Plus Monthly Fee

SAN FRANCISCO, Oct 6 (Reuters) – Cisco Systems Inc (CSCO.O) launched a $599 home videoconference system, a high-quality rival to Skype and other low-cost providers, as the network equipment maker seeks to expand in the consumer market.

The high price, and a $24.99 monthly fee, may make it tough for Cisco to win much of a following among consumers, many of whom are using free, online video chat services, analysts said.

But they also said the move shows the company is set on keeping up double-digit revenue growth even as its traditional routing equipment business matures, by expanding its target from business clients to consumers.

"I think the difficulty is probably the monthly price. $300 a year forever, that’s a lot of money," said Gartner analyst Ken Dulaney. "But this is a premium product. And I think it will set the imagination off with a lot of people."

The home TelePresence system, called "umi," features a camera and console that connects to a standard high-definition TV and works over high-speed Internet. Its biggest selling point is high quality, real-time video without the pixelations and interruptions of low- or no-cost online services. It also allows unlimited calls, video messaging and video storage.

The product will be available next month, and can be pre-ordered on Cisco’s website. Best Buy (BBY.N) will sell it starting next month, and Verizon Communications Inc (VZ.N) will sell it starting next year, Cisco said.