Cisco has presented umi ('you me'), a system for video calls over a TV. However it's highly questionable whether this will catch on. While the specifications suggest a high-quality service, the system has a high price tag, of USD 600 plus USD 25 per month. Furthermore, umi is only, for the moment, suitable for one-to-one calls. More positive is a certain level of interoperability with Google video chat.
A different piece of hardware was announced by Logitech, the Revue. Similar to Apple TV, the new 'buddy box' brings broadband content to the TV. This is the first product with Google TV pre-installed. The price is half that of Cisco's product (USD 300), but there it also may be too high. Apple TV costs just USD 100, and the in the US well-known Roku box is almost half that, at USD 60. A further disadvatange is that it's not a hybrid set-top box: the Revue does not have a tuner and cannot replace the existing STB. As a result, the consumer still has two boxes.
For Logicitech that's less of a worry - the company is, just as Apple, a hardware maker and not unsurprisngly has surrounded the Revue with a range of peripheral accessories. In the end the question is whether the box works well. At the recent Intel Developers Forum, the box froze a number of times during demonstrations. Crashing is a well-known phenomenon for the buddy box. What's interesting is the camera also being launched, which just as the umi allows the box to be used for video calls. Again, there are serious downsides: the price (USD 150) and the fact that the system is not interoperable with other systems. As a result, the system will have to make do for the moment without network effects (Metcalfe Law). Whatever the case, hard-core Google fams can now breathe a sigh of relief as Google TV is coming, if everything goes right, at the end of October to the market.
A few more observations. First, boxes like the Revue form a certain threat for telecom operators. The more content is delivered via broadband (over the top), the more consumers will give up their broadcast sbscriptions (cable, satellite, DTT, IPTV), a phenomenon known as cord cutting. Second, video calls are getting a clear push. Skype scored deals in January with (NetCast) and Panasonic (Viera Cast) to include Skype in their connected TV portfolios. Apple is also takling part with FaceTime, especially once this works via the Apple TV box, making it a real over-the-top service.
Third, we see a further increase in the types of connected devices. After the computer/laptop and the smartphone/iPod (via Wi-Fi), more and more devices are making use of an available broadband connection. The connected TV and the hybrid STB, the femtocell, the iPad, the Kindle, the buddy box, and now also umi from Cisco. The umi notably requires an upload speed of 3Mbps for optimal quality, and it's clear there will be consequences for required bandwidth, especially if the system is shared by several people (family members, students in the same house, etc).
Conclusion: we are at the start of a number of important new trends, especially OTT and video calling, with the expected consequences for the quality of infrastructure. Video calls could end up an important new application, and its' not surprising that Cisco has made an agreement with Verizon to market umi to its Fios (FTTH) customers from early 2011. Interesting also is the new Skype version for Android, which makes Skype use via Google TV possible. As for OTT, rival Dish Network, a satellite TV provider in the US, is distributing the Revue. Dish is, just as Logitech, a partner since the first announcement of Google TV. This has resulted in an assured level of intergation, as the Dish DVRr can be controlled through the Revue. Dish, still the only operator partner for Google TV, is using this strategy to shut off various standlone OTT services such as Apple TV. In Europe, Liberty Global (UPC) will launch next summer a hybrid STB (which will replace the existing STB). We expect that more operators, in cooperation with Google TV or other software developers, will soon enter the OTT market.
