Cisco's new Umi: The answer to a question nobody asked

    Despite such high-profile marketing, Cisco will have to work hard to buck the predominant model for developing video-calling services: videochatting as a free or low-cost add-on service to push pieces of hardware like computers and the Apple iPhone (AAPL) and Android phones. Cisco will have to find a way to add value to the chatting experience that, say, an iPhone can't, and improve the service faster than Apple can. Cisco also has to hope a previously untapped market for high-end videoconferencing actually exists.

    HP once tried to do this too, in 2009, with a high-definition videoconferencing system called SkyRoom. SkyRoom was different from Umi in that it was made for PCs, and HP initially released it on workstations for businesses and some of their higher-end laptops. It cost $149 and was ultimately supposed to hit mainstream consumers. A year later, no one remembers it.

    Finally, even if there is a demand for high-end videoconferencing, Logitech released a new product yesterday that's cheaper. The Revue box, the main device, enables Google TV on screens that can't run it now. It costs $300, with no subscription fee. Customers who want to chat in high definition have to buy a webcam for $150 and download free chat software. Still not as easy as a Skype account, but if consumers are going to buy a set-top device, why not one that does more and costs less?

    A failed Umi launch won't take Cisco down—it's doing far too well with its business-oriented products. But unless Cisco knows something we don't, Umi will not help drive the company's move toward the consumer marketplace.