Cisco to sell off Linksys division

Linksys logoBloomberg is reporting that enterprise networking gear maker Cisco has engaged the services of Barclays to offload its Linksys division. Linksys, which makes home networking gear like SOHO routers and wireless access points, was acquired by Cisco in 2003 for $500 million, and its products have been sold with the branding "Linksys by Cisco" since. Linksys products have retained their focus on home users, while Cisco's main branding has been reserved for its enterprise equipment.

According to the Bloomberg report, the move to sell Linksys comes as part Cisco's broader strategy, which will see it exit the consumer space entirely. The report makes a comparison to Cisco's Flip video camera acquisition in 2009; in spite of promising technology and good sales, the small HD video cameras were discontinued by Cisco in 2011. Speculation at the time was that Cisco had been more interested in acquiring Flip's intellectual property portfolio and integrating it into their own videoconferencing technology rather than actually selling pocket-sized video cameras to consumers.

Cisco to sell off Linksys division

The divesting of Linksys does indeed align with the direction Cisco stated it was headed in 2011, namely the shedding of consumer businesses and focusing on five specific areas: "core routing; switching and services; collaboration; architectures; and video." Cisco has a tremendous presence in data centers and telecom closets, and there's a lot of shareholder value in focusing on higher-margin enterprise hardware rather than notoriously low-margin consumer gear. Bloomberg speculates that the Linkys sale will likely return far less than the $500 million Cisco originally paid nine years ago, precisely because Linksys products carry such a low margin.

Cisco is also still stinging from the PR backlash it triggered six months ago when it attempted to drive all of its Linksys users toward a managed service with Cisco Cloud Connect. That service ostensibly made it easier for users to manage all their Linksys devices from anywhere by grouping them all into a single portal. But the move had the practical effect of forcing users to log into a Cisco website in order to view or change their own device's settings. Cisco eventually relented, but the misstep cost a tremendous amount of goodwill among tech-savvy consumers.

There is no word on potential buyers for Linksys, though it might be a tough sell: whomever picks it up will be taking on what Bloomberg characterizes as "a mature consumer business," meaning that Linksys arrives as-is, without much room for innovation or large revenue spikes.

Source: Ars Technica

Tags: Cisco

Add comment

Your name:
Sign in with:
Your comment:

Enter code:

E-mail (not required)
E-mail will not be disclosed to the third party

Last news

Galaxy Note10 really is built around a 6.7-inch display
You may still be able to download your content
Facebook, Messenger and Instagram are all going away
Minimize apps to a floating, always-on-top bubble
Japan Display has been providing LCDs for the iPhone XR, the only LCD model in Apple’s 2018 line-up
The 2001 operating system has reached its lowest share level
The entire TSMC 5nm design infrastructure is available now from TSMC
The smartphone uses a Snapdragon 660 processor running Android 9 Pie
The Samsung Galaxy A5 (2017) Review
The evolution of the successful smartphone, now with a waterproof body and USB Type-C
February 7, 2017 / 2
Samsung Galaxy TabPro S - a tablet with the Windows-keyboard
The first Windows-tablet with the 12-inch display Super AMOLED
June 7, 2016 /
Keyboards for iOS
Ten iOS keyboards review
July 18, 2015 /
Samsung E1200 Mobile Phone Review
A cheap phone with a good screen
March 8, 2015 / 4
Creative Sound Blaster Z sound card review
Good sound for those who are not satisfied with the onboard solution
September 25, 2014 / 2
Samsung Galaxy Gear: Smartwatch at High Price
The first smartwatch from Samsung - almost a smartphone with a small body
December 19, 2013 /

News Archive



Do you use microSD card with your phone?
or leave your own version in comments (15)