Cisco wants to become a common old household name synonymous with great home entertainment and communication, the company’s Chief Executive has said. He has also confirmed the Linksys name is heading for the bin.
Chairman and Chief Executive John Chambers, speaking at a press conference during the NXTcomm telecommunications industry trade show, pointed to the opportunity in managing the complexities of all of the connected devices in the home. Cisco has made several moves to position itself into the consumer market. It revamped its logo and focused on getting its name out in popular shows such as “24.” The company has pushed its Linksys home router business to consumers and the small and medium business segments. But critics say a lack of experience in the consumer market may hinder progress.
“How many people from Cisco consumer come from Levi Strauss, McDonald’s, or a mass retailer? Probably not many,” said Carl Gressum, an analyst at research firm Ovum.
Much of the work force at Cisco and its various units are veterans on the corporate side, he said, but they lack the ability to cater to customers the way someone like Apple Inc. (AAPL) does.
This isn’t deterring Cisco. Chambers said he expects to eventually consolidate its various businesses – including Linksys and Scientific Atlanta – into a single brand. He added he also plans to work together with Apple in some fashion down the line. His demonstration during his keynote speech at NXTcomm – a feature that allowed a person’s music to follow him from the car to the mobile device to the home – was clearly geared toward the consumer.
Chambers also spoke highly of unified communications, or the integration of multiple services like voice, video and data into a single device. With the opportunities there, he acknowledged that Cisco would likely be competing with software giant Microsoft Corp. (MSFT), but that they would also partner in other ways.
Chambers said consumer electronics companies or service providers could end up managing the multiple services, which can come from the network.
Cisco’s interest in the consumer market goes back to its focus on switches and routers. The company wants consumers to adopt products and services that will put further strain on the network, thus driving demand for more Cisco gear. Gressum said it’s likely that Cisco generates less profits and revenue from the consumer area. The company currently gets much of its growth from spending by the telecom carriers, which have devoted much capital into their networks.
One area Cisco won’t be participating in is the possible model of selling television set-top boxes directly to consumers. While the idea has been bandied about, Chambers said he wouldn’t want to alienate his service provider partners.
