Update: See comment below on Cisco entering the Compute Server Business.
Cisco is thought of as a successful network equipment vendor selling switches and routers to enterprise customers and service providers. The company also sells (Linksys) WiFi routers and (Scientific Atlanta) set top boxes for use within homes. Sensing a new opportunity, the company now wants to make significant inroads in the digital home based entertainment market.
At CES next week in Las Vegas, Cisco will announce a new line of products, including a digital stereo system that is meant to move music wirelessly around a house. Sometime later in the year, the company plans to introduce a residential video conferencing system using camera’s and high-definition televisions (HD TVs). The quality will certainly be much better than today’s web cam technology, but will consumers be willing to pay for it? Cisco believes that in the near future, all TVs will be connected to home networks, but they don’t say how (we think it will be wirelessly-perhaps via IEEE 802.11n).
Cisco started to pursue the home networking market with Linksys WiFi routers and by acquiring set top box manufacturer Scientific Atlanta which is sold to MSOs. But the CES announcement is an attempt at a much bigger penetration of the home electronics market. Cisco hopes that people will want to use a version of its corporate videoconferencing system (Telepresence) for video chats with their friends and family over their HDTVs.
Opinion: We think it will be very difficult for Cisco to compete with brand name home elecrtronics companies like Sony, Panasonic, Apple, Samsung and many others. Considering the global economic contraction and its negative effect on consumer discretionary spending, this could be quite a challenge. Do you think they can compete? Do you think their timing is right?
With a Digital Stereo, Cisco Systems Is Starting a Push Into Home Electronics
Cisco tests out home electronics market
Postscript: Have you noticed the raft of new Cisco TV commercials for Telepresence and home networking? They are evidently directed at consumers to build brand awareness.