Can Cisco Become a Consumer Electronics Company?

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Can Cisco Become a Consumer Electronics Company?

To Cisco's competitors and there are many, the company is a monster. Almost impossible to compete with on a level playing field. In the past I have mentioned how the way Chambers and company acquires and integrates new companies into the fold is better than just about any other company and only Oracle is as talented.

Om Malik does point out a severe weakness the company has... Its inability to compete in the consumer electronics business in a serious way.

Here is my favorite part of his post:

How does a company that gets big fat margins from selling expensive equipment (and paying its sales team accordingly) live with the razor-thin margins of consumer entertainment gear? For Cisco this would like climbing Mount Everest without an oxygen tank.

Om says Cisco is best served by joining forces with another company in a partnership allowing the companies to more easily move media around the home. What value Cisco adds to this equation though is unknown.

In the corporate world you don't get fired for buying Cisco but at home, the rules are very different and strong CE companies already have the relationships and access to shelf space.

Still the company will continue to try and if it gets it right there are certainly huge financial gains to be made. Sure the margins are lower but if you can build a strong consumer brand, you are able to extend your product line into multiple areas quite rapidly.


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