Cisco in your home

[dhilipkumar]

Cisco in your home

If you haven't noticed, Cisco Systems, whose products have been used to build the Internet for 20 years, has spent the past 6 years becoming a big player in the consumer electronics market.

While Cisco still generates the bulk of its $10 billion in yearly revenue from selling routers and switches to large companies and Internet service providers, the company has also been pushing into new markets, such as consumer electronics, over the past several years.

Still, most consumers probably have no idea who Cisco is or what it does. Sure, they may have seen those cute "human network" commercials on TV. But other than that, I'd guess the average Joe has no clue what Cisco does.

Some might be familiar with the Linksys brand, which has traditionally sold home networking gear. But Cisco executives say they are on a mission to make Cisco a household name. Not only is the company making a bigger effort to brand its products as Cisco, but it's also busy developing a slew of new products for the consumer market.

And on Thursday the company announced its most aggressive play in the consumer market to date with the $590 million acquisition of Pure Digital Technologies, the maker of the popular Flip Video min camcorders.

But Pure is by no means the only major acquisition Cisco has made in the consumer market. In fact, the company so far has pretty much built this part of its business through acquisitions. In 2003, it got its start in the competitive CE market with the $500 million acquisition of the home-networking equipment maker Linksys. Then in 2005, it bought Scientific Atlanta, a quasi-consumer electronics company, for $7 billion. Scientific Atlanta makes set-top boxes that Cisco sells to subscription TV providers.

Since then the company has made a few, smaller consumer electronics purchases. In 2005, it spent $61 million in cash for a small Danish company called Kiss Technologies. Cisco never ended up selling Kiss' online video-on-demand boxes, but it has integrated the technology into some of its new products. In fact, Ned Hooper, senior vice president of Cisco's Corporate Development and Consumer Groups, said in an interview that some of Kiss' technology made its way into Cisco's new Media Hub, which was announced in January at the Consumer Electronics Show. And some other bits of the technology have also been integrated into Scientific Atlanta's products.

To give readers a sense of just how far along Cisco is in its efforts to win over consumers, I've highlighted some of Cisco's most important products in the consumer market. From its flagship Linksys router to the newly announced Home Audio and Media Hub products to the newly acquired Flip Video cameras, Cisco is building up an arsenal of consumer devices that not only connect devices together via a home network, but also help users produce and share digital media throughout the home and throughout the Web.