Analyst: Price of Cisco's umi likely limits reach - BusinessWeek

NEW YORK

Kaufman Bros. analyst Shaw Wu said Thursday Cisco's new home videoconferencing product is "much better" than free services like Skype with a webcam, but its high price will likely limit widespread adoption.

Cisco Systems Inc. said the product, umi, will cost $599 plus $25 per month. It includes a camera and TV set-top box that are controlled by a remote control.

THE OPINION: "We believe there is a market for premium video conferencing, but it will likely be a high-end niche," Wu wrote in a note to investors.

But with a lower price or the elimination or at least the lowering of the monthly fee, "we see great potential to reach the broader mainstream market," he said, adding that many people would likely consider using this over a voice-only phone call.

THE STOCK: Shares of the San Jose, Calif.-based networking equipment maker climbed 3 cents to $22.33 in midday trading.

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