The video iPhone may outstrip Cisco’s Flip, but the networking vendor has other video ambitions.
When Apple launched its video-enabled iPhone in June, the cheap camcorder market suddenly got crowded. Just three months before, networking giant Cisco acquired PureDigital, maker of the popular Flip video camera, for $590 million. An Apple-Cisco collision seemed inevitable.
But while PureDigital’s standalone video camera will face stiff competition from the video iPhone (see “Why Apple Could Kill Your Camera”), Cisco’s ( CSCO - news - people ) Flip acquisition was made with other ideas in mind, says Ken Wirt, Cisco’s vice president of consumer marketing. In the next year, Cisco plans to create an Internet protocol video system that will be compatible with televisions, a so-called “telepresence” system for the home. Eventually, Wirt says, the company will likely integrate technology from the PureDigital acquisition to allow users to record and share video clips through that system.
Though Cisco isn’t revealing the details of that future consumer version of its high-end telepresence systems, the company hinted at the idea of living-room video conferencing when it acquired PureDigital. “Eventually, we’ll put [telepresence] in peoples’ home,” Carlos Dominguez told Forbes at the time. “You have a high-definition television and a set-top box. All you need is a high-definition camera.” (See “Why Cisco’s Flipping Into Consumer Video.”)
While growing sales of the Flip cameras likely factored into Cisco’s PureDigital acquisition, the buyout was also focused on software that would enhance Cisco’s video conferencing plans, Wirt says. “The Flip isn’t just the device, but also the software that comes with it, which allows you to very easily put clips together and let you upload it,” Wirt says. “That’s where it fits into our vision.”
A home videoconferencing system based partly on the Flip would likely make use of Cisco’s other consumer networking assets, including its Scientific Atlanta TV set-top boxes. “Today, devices are silo,” Wirt says. “Consumers want something that allows you to connect to a cloud service and augment your experience.”
Even if Cisco’s Flip strategy doesn’t put the camcorder in direct competition with iPhone-like video devices, its consumer videoconferencing plans will face other competitors, including the popular online video platform Skype. But Cisco’s TV-focused strategy could offer an advantage, says Forrester Research ( FORR - news - people ) analyst James McQuivey. “It’s a gamble,” he says. “But if a family wants to video conference, all have to gather around the computer. That’s a step that does inhibit the technology. [Cisco's] betting that people will use a television system more often, and they’re probably right.”
Fostering more consumer video plays into Cisco’s larger aim of feeding the Web’s growing video needs. In a study released in June, the company predicted that by 2013, Internet traffic will account for 667 exabytes a month–the equivalent of 10 billion DVDs–and video would account for 90% of that traffic.
Cisco’s networking products are aimed at giving broadband providers the tools to handle that fire hose of video data, such as the ASR 1000, a video-focused router that the company released last November. In other words, consumers can film their pet tricks on a Flip or on an iPhone. If it ends up on the Web, Cisco likely wins.
Courtesy of: www.forbes.com/home_usa