Bloomberg reports that Cisco has hired on Barclays Plc to find a buyer for Linksys, the popular maker of wireless routers for home networking. Cisco purchased the company back in 2003 for $500 million in stock, and then added its name to Linksys branding in 2008. Now the company wants to shed this division as part of its overall plan to exit the consumer sector.
Unnamed sources told Bloomberg that Cisco is looking to expand its corporate software and technology services. Its trek into the consumer technology frontier has backfired, sources said, caused by a slowdown in sales growth which forced Chief Executive John Chambers to eliminate 7,800 jobs over the past year, and close consumer-based businesses such as the Flip video camera unit.
In Cisco's most recent quarterly report, the company said revenues of its "other" business unit – where Linksys resides – were $220 million, down 11-percent over the year-ago quarter. Sales were also down in the three previous quarters, dropping $42 million in Q4'FY12, $42 million in Q3/FY12, and $130 Million in Q2'FY12.
Karen Tillman, a spokeswoman for San Jose, California-based Cisco, declined to comment. But sources close to the situation claim that the Linksys unit may attract the interest of TV manufacturers looking for a recognized brand and technology. Unfortunately, Linksys will likely not fetch the same $500 million Cisco original paid because it's a "mature consumer business with low margins".
One company that may be eying Linksys is home networking competitor Belkin International. A blog over the weekend posted the unconfirmed rumor, and then a follow-up message from Leah Polk, Senior Global Public Relations Manager of Belkin International, saying that it was merely a rumor and currently there's no official statement to make.
Last month, Cisco said it planned to acquire privately held Meraki Inc., a San Francisco, Calif.-based start-up that "offers midmarket customers easy-to-deploy on-premise networking solutions that can be centrally managed from the cloud."
"As the IT industry transforms in the mobile-cloud era, Cisco is solving customers’ networking and business enablement challenges by delivering cloud networking and device and security services," Cisco said. "The acquisition of Meraki complements and expands Cisco’s strategy to offer more software-centric solutions to simplify network management, help customers empower mobile workforces, and generate new revenue opportunities for partners."
In addition to Cisco, Barclays is also reportedly advising Google on the sale of its Motorola Home Business which sells set-top boxes and equipment to cable TV providers. Google is wanting Motorola to focus on high-end smartphones so that it can better compete with Apple.
Before Cisco had Linksys, these were the best routers you could get for the money.
Hopefully they can return to that reliability and quality.
Bought this spring and have no issues. I had a WRT model as well that I retired only because I wanted dual-band and USB support. Been very happy with Linksys which is more than I can say for Belkin. First wireless router I owned, thing self-destructed right after the warranty was up. Also have a wireless bridge from Linksys, no problems. Do also have a couple Netgear wireless adapters which have been awesome. If Belkin were to buy Linksys, it would be a boom for Netgear as those who are familiar with the market stay away from anything Belkin.
With that history of screwing up, why take the chance?
is that suppose to be "i hope does not buy them" ?
sun-devil99 Been very happy with Linksys which is more than I can say for Belkin. First wireless router I owned, thing self-destructed right after the warranty was up. <snip> If Belkin were to buy Linksys, it would be a boom for Netgear as those who are familiar with the market stay away from anything Belkin.
Maybe i've just been lucky (or maybe the newer routers are crap) but my family have/had a 3 Belkin routers over 10 years and they last well beyond there warranty.
First was just a 4 port wired router in early 2000's (only had 1 desktop and no laptops at the time). Had that for for a number years then my dad gave that to a friend when there router failed (think there router was a netgear.) It might still working to this day but probably not being used with laptops/smart phones being the rage.
Second was a G router in '05 around that lasted about 3 years until power surge took that out (it took out other things as well even though all the stuff taken out was on power surge protectors). Only issue with this router was that it's range was a bit weak even though we were in a medium size house at the time.
3rd and currently my family has a F5D8233-4v3 that was bought in mid '08 and is still going strong. No issue with this, performance is good for the majority of the family as they only use the internet and transfer doc's on the network drive (I'm the only one that can really make the network crawl with HD TV recordings playing from WMC or transferring large ISO images.) ,and the range as been great even with moving into 3 different house with very different floor plans.
yes, I am familiar with the market and well aware that some people have issues with Belkin. Although I have my personal experience to go on as well and nothing major has made me turn away from getting them.
About 6 months ago I upgraded to a Linksys EA4500, which was expensive but had good reviews, and it's been trouble-free so far.
The WRT54G meanwhile lives on at my brother's house.
Same here, I started with a tp-link G (WR541G) router about 4 years ago (never had it fail even once) and replaced it recently with a tp-link N (WR841N) router that has likewise never failed. By never failed, I mean that after setting it up, the only time it has ever reset or lost connection has been due to power interruption or ISP connection failure.