Network equipment maker Cisco Systems Inc plans to begin selling later this year a long-awaited, affordable home version of its TelePresence videoconferencing system for corporations.
Cisco said it would team up with phone and Internet service provider Verizon Communications Inc to install the system in U.S. homes. Field trials begin this spring, it said.
Cisco has been expanding from routers and switches to more consumer-oriented products through acquisitions, including its 2006 deal for cable set-top box maker Scientific Atlanta and its more recent plan to buy Norway's Tandberg, the world's leader in videoconferencing equipment.
The latest announcement also comes as competition in high-quality video communications expands to the living room from the boardroom.
No. 2 video conferencing company Polycom Inc, which also targets corporate customers, also unveiled a videoconferencing system this week, using technology by IBM.
Skype has recently joined the fray, responding to demands from online video chat users for more life-like video quality. The privately held company has forged deals with consumer electronics makers LG Electronics and Panasonic to move its Internet video service to home TVs.
Cisco Chief Executive John Chambers did not reveal a specific sales date or price, but said on Wednesday that it will likely sell the consumer product at an affordable price. Its TelePresence systems installed in corporate boardrooms can cost around $34,000 to $300,000 per unit.
It will be inexpensive enough this year, he told reporters on the sidelines of the Consumer Electronics Show in Las Vegas, when asked about the price of the consumer version.
Chambers has repeatedly said that video would be a key driver for Cisco's growth in the coming years. The popularity of bandwidth-heavy services like online video is seen benefiting its overall business, including the routers that support Internet connections.
Slow Internet connections have been the main obstacle to expanding high-quality videoconferencing into homes, and Cisco executives have said a partnership with an Internet service provider would be crucial to ensuring high video quality.
Cisco said Verizon would be an early partner -- leaving room for more partnerships ahead. The company also cited a forecast by research firm IDC that there are around 32 million U.S. households with Internet services that are adequate enough to support high-quality home videoconferencing.
The new videoconferencing system will use consumers' existing high-definition television sets and broadband connections, it said.
It also said field trials in France will start later in 2010, in partnership with France Telecom.
(Reporting by Ritsuko Ando and Sinead Carew; Editing by Paul Thomasch, Robert MacMillan and Bernard Orr)