Cisco aims to be a household name
Cisco Systems, the dominant provider of the digital pipes that run the Internet, is making a big play in digital entertainment. At the Consumer Electronics Show in January in Las Vegas, it plans to introduce a line of products, including a digital stereo system, meant to move music wirelessly around a house.
That is the first small move in a long-term strategy to take on Apple, Sony, and the other consumer electronics giants. Cisco is working on other gadgets that will let people watch Internet video on TV sets more easily. Its biggest bet is that people will want to use a version of its corporate videoconferencing system, Telepresence, to chat with friends via high-definition TV.
While Cisco is a newcomer to consumer electronics, it says that after years of promises, the consumer electronics industry is only now taking advantage of broadband Internet connections and home networks.
"This holiday the vast majority of consumer electronics purchases will be connected," said Ned Hooper, a Cisco senior vice president. Many music players, digital cameras, game consoles, Blu-ray players, and a variety of set-top boxes connect to the Internet directly or via computer. Although they are digital, most of the high-definition televisions sold so far do not have Internet connections. But Hooper argues televisions soon will also be connected.
Ultimately, Hooper said, the company expects to make the most money on home video conferencing. Today, Cisco is making a major effort to sell Telepresence rooms to corporations for $40,000 to $300,000 each. Cisco envisions bringing a cheaper version to consumers in the next year or two. It's trying to develop standards that would make placing a video call as easy as dialing a phone number.
But for Cisco, the biggest profit may still be in the plumbing: As more people use the Web to watch programs, networks will be forced to buy more routers and switches.