Most consumer electronics gear has since left the Linksys line, which is now dominated by connectivity products. Cisco was faced with a choice between developing a competitive home ecosystem around Linksys or spinning off the company, according to Kerravala. For example, Apple's Time Capsule is a router and backup device in one box and is built to work with other Apple technologies such as Bonjour and AirPlay, he said. Linksys now faces rivals such as Apple that are integrating Wi-Fi routers into other types of products, Kerravala of ZK Research said. "It's less likely that companies come out of the network and into the living room," Kay said. Vendors such as Samsung Electronics, which have long experience and established brands in that business, can fairly easily add networking to their products, said Roger Kay, an analyst at Endpoint Technologies Associates. Yet even as networked entertainment fed the popularity of Wi-Fi, the core of Linksys' business, it also brought networking into the realm of more established consumer electronics brands.Īs a consumer electronics company selling through traditional retail channels, Cisco was outgunned, analysts said. A home media server for storing content was another such offering. At 2004's Consumer Electronics Show, it unveiled a DVD player that could stream video and audio over Wi-Fi and announced a music player designed for wireless streaming. Cisco tried at one time to make its home networking products part of a broader architecture of consumer devices. In the 10 years Cisco owned Linksys, home networks began to merge with consumer electronics through online entertainment services and over-the-air streaming of video and audio. "For Cisco to have done that, I think, would have required a much bigger shift in company strategy than they were willing to do." Dell and Hewlett-Packard, for example, are struggling in both arenas, he said. "It's a very rare company that can actually have a strong consumer brand and corporate brand," Kerravala said. It takes a different mindset to capture and keep fickle consumers, said Zeus Kerravala of ZK Research, a longtime Cisco watcher. Instead, the company is addressing the home indirectly through service providers, the kind of large, established enterprise customer it understands best.Ĭisco already had strikes against it as a consumer products company when it acquired Linksys, a successful home networking specialist, in 2003, industry analysts said.įor one thing, Cisco builds most of its businesses around solid profit margins and maintaining market leadership over the long term, the hallmarks of product lines that are typically sold to top IT executives. Yet despite charting a course for leadership in IT systems, software and services, Cisco isn't completely leaving behind home networking and the burgeoning use of online video and other applications. Next Thursday, the company will shut down the short-lived home telepresence service it offered in conjunction with its already-discontinued Umi device. Since then, Cisco has been sharpening its focus on enterprises and service providers, and the writing has been on the wall for the consumer business. The company made that move as it kicked off a major reorganization in response to disappointing business results. The deal, which is expected to close in March, has been in the cards since Cisco's shutdown of its Flip video camera business in early 2011. The privately held maker of networking gear, peripherals and accessories plans to fold Linksys' employees and products into its operations while keeping the Linksys brand alive. Cisco Systems' sale of its home networking business to Belkin International marks the end of a 10-year odyssey through the world of consumer products, but the company plans to keep reaching consumers through their carriers and cable companies.īelkin announced on Thursday that it would buy Cisco's Home Networking Business Unit, including its Linksys brand, for an undisclosed sum.
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