Analysis: Cisco set on proving it can succeed in tablet market

By Nicola Leske

December 2, 2011 4:00 PM EST

(REUTERS) -- Cisco Systems Inc is stepping up its push to sell its Cius tablet computers to corporate customers, defying skeptics who say the product is short of the sex appeal and brand recognition it would need to win over the workforce.

In a sign of its confidence, Cisco says it will soon introduce a 4G version of the Cius, an upgrade to the 7-inch tablet computer that it began shipping to corporate customers in August. Cius, which plugs into a phone docking station, is built on Google Inc's Android operating software.

Whether Cisco's confidence is misplaced remains to be seen. By most accounts, it faces a number of challenges when it comes to selling Cius, not the least of which is that few people seem familiar with the brand.

Chuck Fontana, Cisco's head of product management, acknowledged that "people hardly know it exists because you can't get it at Best Buy, but this is not a device you get for your teenager."

Even with better brand recognition, there is a question of whether it has come too late to a market currently dominated by Apple Inc's iPad, which is both bigger and lighter than the Cius.

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Still, Cisco, a network equipment maker, contends that Cius will appeal to corporations because of its advanced security options and features that allow customers to manage data or erase sensitive corporate documents remotely.

Cisco can also point to a handful of other appealing details: The Cius offers advanced video conferencing and functions as a phone on-the-go, while giving users access to games and media.

Cisco declined to say how many tablets it has sold so far but said about a thousand company customers have begun using Cius in the last three months. Among them, healthcare group Kaiser Permanente has been using Cius, and South African telecom company MTN is rolling it out to its workforce, Fontana said.

For the new 4G version, Cisco has partnered with AT&T Inc and next spring it plans to offer a Verizon Wireless enabled version and more models with different screen sizes.

"You're always late in tech," said Fontana. "But this is really innovative."

FREEDOM OF DEVICE

There are doubts, however, that Cius can win over corporations in a world where employees increasingly want to bring a device of their choice to work.

"We can see that Cisco believes enterprise communication is evolving toward tablets, but find it hard to believe that most people will end up using Cisco tablets for that purpose," J.P. Morgan analyst Rod Hall said in a note.

Carolina Milanesi of Gartner research agreed. "As an employee you want a tablet that was created as a tablet, one that's sexy not one that's coming from desk phones."

Copyright 2012 Thomson Reuters. All rights reserved.
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