With a new Media Solutions Group in place and a basket of products coming out at the International Consumer Electronics Show in January, Cisco Systems is gearing up for changes in its increasingly important consumer strategy. The company won't -- or can't -- say much about what it will be doing, but with a presence in carrier as well as home networks, it could play a growing role in how people are entertained and keep in touch.
Cisco is strongly pushing IP phones such as the iPhone, introduced earlier this week. But digital video was on the lips of all major Cisco executives last week at the company's C-Scape analyst conference, where they talked up the recently introduced Telepresence Meeting system for enterprises as well as other business and consumer uses of video.
A data networking company can only become a home entertainment company if TV, movies, music and other media all turn into movable packets, which is what is happening now on telecommunications and cable networks. To take advantage of this, Cisco is helping broadband providers build core networks, and it bought Scientific-Atlanta, one of the biggest makers of the set-top boxes that deliver video to TVs. Its Linksys division is already the sales leader for home networks. The company doesn't expect to make cell phones, but it wants to offer the infrastructure for delivering services across all wired and wireless networks. Before long, those technologies could comprise the path that most entertainment takes into homes.
Executives were vague about the San Jose, California, company's plans. To start with, the company promised several new products at CES and hinted at a possible change in branding there. Though executives crowed about how the Linksys and Scientific-Atlanta brands are respected, only the Cisco name covers the company's end-to-end vision. As for the Media Solutions Group, it's expected to become a US$10 billion annual-revenue business. Charles Giancarlo, Cisco's senior vice president and chief development officer as well as president of Linksys, could only give a hint as to how.
"Where can a user get access to many different areas of content, from many different companies, and bring that together so it all looks like one thing, and one list? Cisco is working with many of the content suppliers so that the solutions in the home will allow those content suppliers to be able to provide what they have, but from an end-user standpoint it all looks like one system," Giancarlo said.
Video is the biggest piece of this vision. What's changed most for end users, whether at work or at home, is that video is now personalized, said Mike Volpi, senior vice president and general manager of Cisco's Routing and Service Provider Technology Group. Users don't have to turn on the TV at a certain time to watch a show or leave their desks for a simple video chat, he said. They can get video where and when they want it.
Cisco wants to deliver everything needed for video services, including the core and edge of the carrier network, the home network, and the middleware to handle encoding, digital rights management, advertising, billing and other elements, Volpi said.
Users do want music, video and other content from carriers and the Internet in one place, said In-Stat analyst Joyce Putscher.
"The average consumer has a great interest in being able to share the content anywhere they want, see it anywhere they want, hear it anywhere they want," Putscher said. However, it will have to be simple, she added.
Cisco's vision of all-in-one digital entertainment could take the form of a home media server integrated into a set-top box, Putscher said. The central device could even be separate from the set-top box as long as Cisco made it easy for the consumer to use them together, she added. The company might offer an architecture that consumer electronics vendors could adopt for interoperability, Putscher said.