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Millions of people use Skype every day to place hold video chats with friends, family, and business colleagues across town or around the world… for free. All you need is a computer with a Web cam and a microphone, and you’re good to go. There are even Skype applications that let you have a video chat with someone using certain models of smart phones. (You need one with a camera that faces you while you’re looking at the screen.) There are also other systems that offer free video chat, from giants such as Google and Microsoft to smaller companies that specialize in this.

So what is Cisco thinking with its announcement this week of its new “umi” product? (Yes, it’s pronounced “you-me”, because that’s who is involved in the video chat. Cute, huh?) First, you have to have an HDTV with an available HDMI connection, as well as a high-speed broadband connection. Then you have to pay $600 (list price) for the hardware. And finally, you also have to pay $24.99 a month for the service. Huh? Why on earth would anyone pay about $900 (for the first year) just to have video chats with others when you can do it for free using other services?

The answer is that the Cisco service should be a lot better. I use Skype for video chat a lot, and while it’s great, the image and sound quality is not always ideal. Think back to the days of analog cell phones and “can you hear me now?” It can be sort of like that. Cisco is going to provide a service “in the cloud” where they will be providing the computing power to make sure that you get a good connection every time. And it will do more. If someone “calls” you and you’re not there to answer, they can leave a video message that will get stored in the cloud until you’re ready to retrieve it. And you can access video messages and other features using a laptop, even though it’s not connected to the hardware.

And speaking of the hardware, it’s a lot more than just a Webcam. The package includes a microphone array that should be able to pick the sound of your voice out of the ambient noise in the room. The camera is motorized, so that it can pan and zoom in response to remote control commands. In other words, it’s designed from the ground up for living room use.

Now, if all you could do with this is call other umi users, I’d have a real problem with that. Video phones have failed in the past largely because they never could get enough of them installed to create a useful network. According to the Cisco press release, you will be able to hold video conversations with people who are using the video chat feature of Google Chat. That immediately enlarges the universe of potential conversation partners. And there’s the added benefit that the Google Chat users will be exposed to the advantages of umi, making them prospects to step up to the better service.

We won’t know just how well all this works until it hits the shelves in mid-November, through Best Buy and directly from Cisco. But the company has clearly developed a comprehensive marketing plan which includes mall tours and getting Oprah to use the system to contact people on her show. Cisco looks as though they will be able to make a good case for why you should pay for a service that you could get free somewhere else.

Posted by Alfred Poor, October 8, 2010 6:00 AM

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About Alfred Poor

Alfred Poor is a well-known display industry expert, who writes the daily HDTV Almanac. He wrote for PC Magazine for more than 20 years, and now is focusing on the home entertainment and home networking markets.