John Chambers Officially Gives Up His Dream To Turn Cisco Into A Consumer Brand
With that sale, CEO John Chambers' dreams to turn Cisco into a consumer tech company have ended.
Cisco bought Linksys in 2003 for $500 million in stock. The home router market is a competitive, low-margin business that had total revenues of about $350 million to $400 million annually, according to the analysts at Wedbush.
Cisco never broke out revenues on Linksys products. Instead, they are lumped into a business unit it calls "other." In Cisco's most recent quarterly report, revenues for the "other" unit were $220 million, down 11% over the comparable quarter in 2011.
The end of Linksys as part of Cisco is also the end of an era in which Chambers repeatedly tried to diversify Cisco into a company with both consumer and enterprise businesses, with sometimes disastrous results.
The mishaps include:
- Killing the Flip video camera in 2011, two years after spending $590 million to acquire the company that made it, Pure Digital.
- A PR disaster that ensued after Cisco upgraded a bunch of Linksys users to a cloud service without asking them and issued a confusing set of rules for its use. The rules made it sound like the company was monitoring people's Internet usage and outlawing porn on their private home networks.
- A short-lived home video-conferencing product called Umi that competed with Skype but cost way more money. Cisco killed the product about a year after introducing it.
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