In a continuation of Cisco exiting the consumer market, the networking giant has announced it has sold this division to competitor Belkin for an undisclosed amount. Belkin will continue to honor all valid warranties and will now own about 30% of the U.S. retail home and small business networking market.
Cisco has had many failures in the consumer market for an obvious reason. They are in the business of selling expensive products to IT managers in large, medium and small companies where the margins are far better than they are in the consumer electronics space.
A past example of failure is the Cius tablet which was discontinued. Before I even saw it I said the following:
The downside risk is fairly obvious though and that is that software is cheaper than hardware and most anything the Cius can do, an iPad or other Android tablet can as well.
And then there is the consumer electronics angle – Cisco purchased Flip and shut it down a few years later because the company isn’t very good at competing in the consumer space where margins are razor-thin. Obviously the growth of smartphones helped kill the pocket-sized video camcorder market as well.
Then there was Umi telepresence which I predicted would fail as soon as I heard about it.
Cisco has gotten its mojo back lately and even though its having problems in its video business, it seems to be on solid footing as competitors like HP and Dell are strugging. Of course IBM is doing great and Huawei and ZTE still are formidable.
So the news here for consumers is great as Linksys is back in the hands of a company that gets consumers. Subsequently Cisco has more time to focus on acquiring and/or developing new products for the enterprise and carrier networks.