Now Cisco says it is re-examining retail distribution of Umi, which has used one main store partner, the Magnolia high-end electronics departments in Best Buy stores. Cisco spokeswoman Karen Tillman did not say the product is definitely leaving Magnolia, but said the retail strategy is under review. The other go-to-market plans Cisco is looking at -- carriers and enterprise -- raise questions about the future shape of Umi.

Bundling Umi with broadband Internet access and other services may be the best way to sell the systems to consumers, Parks Associates analyst Kurt Scherf said. A carrier or cable operator that was already selling several services to a household might be able to throw Umi in for a fairly small incremental cost, Scherf said. Consumers might be more interested in that type of offering, he said.

"Throwing a large upfront price point at them, plus a large monthly subscription, was just not the way that you were going to encourage uptake of this," he said.

Cisco would prefer to go through service providers anyway, Scherf said. "They want to feed the service providers the solutions and allow the companies that have the most direct contact with the customers [to] be able to successfully sell those," he said.

At the launch of Umi, Cisco said it was already conducting a trial with Verizon Communications on its FiOS fiber-to-the-home network and that the carrier was expected to launch a Umi service early this year. On Tuesday, Verizon spokesman Alberto Canal said the trial was over and had gone well, but he would not comment on availability of a commercial service.