Home telepresence demand to grow despite hiccups

Maturing tech, availability on multiple devices and cheaper price points keep consumers' interest in home telepresence offerings alive, observers say.
Written by Kevin Kwang, Contributor

Telepresence offerings have largely been targeted at enterprise users with expensive hardware, but it has in recent years become more affordable and more easily accessible to home users through various endpoint devices such as PCs and mobile devices.

Henry Dewing, principal analyst at Forrester Research, pointed out that telepresence started out as a very business-focused market as the large screens and high-definition codecs and good Internet connection meant that the tech requirements and price were too high for the average consumer.

However, tapping the retail market has not been easy, highlighted by networking giant's Cisco System's lack of success. While Cisco's Umi telepresence offering was targeted at consumers, the analyst noted in his e-mail that many of the initial customers were affluent business people or early adopters of new technology who were willing to give the technology a try. Additionally, its prospects were "hobbled" by cable operators' delivery channels, which could not support the necessary price points and technical requirements to allow such a product to flourish, he added.

In the end, Cisco decided to cease selling new Umi hardware last December, although it said it would continue supporting existing customers for the foreseeable future, according to tech news site CRN.

"Cisco withdrew from the market as the company, together with its channel partners, was struggling to create and deliver the correct sales model and the on-premise customer service processes that consumers would accept," Dewing explained.

A Cisco spokesperson said the company, upon reviewing the business and Umi's distribution strategy in April last year, decided to integrate it within its business telepresence portfolio and stop offering the product to consumers. She added that while sales have ended, the service remains unchanged and existing customers will continue to be able to use the service to "make calls to other Umi subscribers or to Google video chat accounts".  

Consumer demand, vendor interest rising
The demise of Umi does not signal the end for home telepresence offerings, though.

According to Skype spokesperson Sravanthi Agrawal, there are several characteristics that are needed for a viable home telepresence offering. These include making the product easy to use and install, be able to reach the people that the user wants to call, the service should be available on any device, not just a television, and the call quality must be good, she told ZDNet Asia in an e-mail.

With these in mind, she added that Skype has a "very strong offering". It has also partnered with numerous television vendors, makers of set-top boxes and blu-ray players as well as cable operators such as Comcast to simplify the installation process for the user and make its offering more attractive, Agrawal noted.

"The usage of video calling in the home remains a substantial and growing opportunity. We believe that customers want affordable, high quality, easy-to-use solutions that connect to a large user base, reachable on TVs but also PCs and mobile devices," the spokesperson said. "We believe that we are just scratching the surface on the size of this market opportunity."

Skype was acquired by software giant Microsoft for US$8.5 billion last year, with the deal ratified in October.

Singapore operators ZDNet Asia spoke to also expressed interest to bring such offerings to their consumers.

Alex Tan, director of product development at M1, pointed out that with the introduction of Singapore's next-generation nationwide broadband network (NGNBN), telepresence may now be offered "fairly easy" to homes. The service was previously targeted at enterprise customers due to barriers such as cost of telepresence devices and connection speed, but with technology evolving, such offerings are now more cost-effective and viable for home usage, he said.

He added that telepresence can be effective and useful for specific industries such as healthcare. "[In cases] where the patient is not fully mobile, home telepresence might prove to be a convenient alternative for such remote health consultations," Tan noted.

That said, the M1 executive noted that home adoption of telepresence "has been slow" and most of the key users are still from the enterprise sector, particularly as an alternative to traveling overseas for meetings.

A SingTel spokesperson also expressed interest in offering home telepresence services. He said: "SingTel is always looking to bring the latest and most innovative products and services to its customers. We currently offer a wide range of video conferencing services such as its fiber-based exPress Portal service for consumers, which offers high-quality video chat for up to 20 participants."

Dewing said the high price for high-definition videoconferencing services such as telepresence will continue to dampen adoption over the next two years. As the prices of components and networks fall though, demand will rise, he predicted.

"I [also] expect to see mobile and home-based video calling or videoconferencing to become a normal part of the communications toolkit for mobile and executive-level information workers within the next three to five years," the analyst added.

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