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Cisco hires Barclays to offload Linksys

Wants out of the consumer networking business
Mon Dec 17 2012, 13:56
Cisco Linksys E4200 wireless router

NETWORK EQUIPMENT VENDOR Cisco reportedly has hired Barclays to find a buyer for its Linksys business.

Cisco bought Linksys back in 2003 to get into the consumer networking business and the firm has put out some good products, most notably the WRT54G wireless router that was a favourite with technology savvy punters. Now Cisco is looking to offload Linksys as it continues to pull back from the consumer networking market.

Cisco has been cutting jobs and products such as the Flip video camera, as it wants to get back to the high margin enterprise networking business. Back in 2003, Cisco paid $500m for Linksys and got access to an established business that focused on producing consumer network equipment.

A decade later, it is being reported that Cisco will be lucky to get its $500m back. Cisco has been pulling out of its failed attempt to get into the consumer market and is now focusing on flogging both network infrastructure hardware and servers, though it is widely expected to be hit hard as software defined networks become more popular.

Unlike Cisco's core enterprise business, Linksys products typically have low margins, and with its parent firm's slowing sales growth, it is not surprising Cisco wants to offload it. Bloomberg's sources said Cisco might find interest in buying Linksys from television makers, though they wouldn't provide any more details. µ

 

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