Why Cisco flicked Linksys

Cisco is set to offload its Linksys business. Business Insider reports the deal may already have taken place.

Linksys makes wireless routers for home users. That makes it a consumer brand languishing in a company that is best at dealing with business and corporate customers.

Networking giant CIsco made its billions riding the Internet growth spurt in the 1990s. In 2003 it sniffed the wind – correctly at it happens – and decided the future lay in consumer and small business products. The company dipped into Uncle Scrooge McDuck-like swimming pools full of gold to pick up Linksys.

At the time it seemed like a good idea. Alas, Cisco never got consumer. Its Linksys products were largely lacklustre РI had the misfortune to own one for a while. Cisco also made a complete mess when it purchased the Flip consumer camera business a few years later.

Now Cisco plans to become an all-embracing enterprise IT business with products and services aimed at the data centre. Making low-margin devices, piling ’em high and flogging them though retail channels simply doesn’t gel with that kind of business. Getting rid of Linksys is a smart move.

What I’d love to know is whether Cisco turned a profit on the US$500 million it paid for Linksys in 2003.

2 thoughts on “Why Cisco flicked Linksys

    • Agree. For a while the Flip was one of the hottest products around. In the end it was killed by smartphones which could shoot video just as simply.

      It was clear Cisco thought the Flip would generate buckets of video content to keep telcos and others buying bigger and more expensive Cisco switches. That might have worked, but the product was a distraction from the core business.

      Like

Comments are closed.