Why Is Cisco Ditching All Of Its Consumer Brands In The BYOD Era?

Cisco is selling off its Linksys home networking division to rival Belkin. Why is Cisco walking away from consumer brands at a time when the influence of consumer technology on enterprise is arguably bigger than ever?

Cisco picture by Adriano Castelli from Shutterstock

Terms of the deal haven't been disclosed, and the transaction isn't expected to be finalised until March. Belkin has said it will maintain the Linksys brand and will honour existing warranties and support.

As a result, that change might not make much difference to the behaviour of individual buyers. Customers who have previously purchased Linksys gear because the developments teams have (in theory) access to Cisco's networking expertise may now be drawn to other brands. What's arguably more interesting is that it signals that Cisco clesarly doesn't want any direct involvement in the business to consumer (B2C) market.

Cisco started sending that message when it ditched the Flip camera business back in April 2011. Getting rid of Linksys makes the Cisco strategy clear: we're about business networks and connectivity. We don't want to be sold in retail stores. We're about serious enterprise smarts, not basic gear. You can bring your own device, but we don't want to sell it to you.

Not all of its rivals are following the same path. Huawei, for example, has been aggressively pursuing consumer buyers, particularly with phones. But there is a certain undeniable logic to the move.

The consumer market is cut-throat and ruthless; margins are thin, there's a constant demand for innovation, and customer support can be costly. Even when you're massively successful, the sniping is constant (check the painfully dull coverage of Apple's financial results this week) By comparison, enterprise and business buyers represent a much less snarky market.

There's also lots of money to be made in providing the back-end systems which power all those consumer devices that are elbowing their way into the office. Delivering cloud-based solutions to tablets and phones requires a robust networking infrastructure. Ditto for rolling out video-on-demand solutions.

In that context, Cisco might draw solace from Microsoft's quarterly results announced this week. The standout area? Arguably not gaming or Windows, but the Server & Tools division. There's still money to be made in infrastructure.


Comments

    Oh dear, I like Belkin equipment and loathe Linksys almost as much as I loathe D-Link. I hope the horribleness of Linksys doesn't bring down the quality, functionality and usability of Belkin.

      lulwat? I can understand loathing D-Link but I've had nothing but problems with Belkin network equipment in the past (failures, functionality not working correctly/missing), Linksys however has been rock solid, full functioned and easy to use...

      Lol yeah I have to agree with Rossco. I've been through a few routers. Belkin is awful. Linksys is rock solid. Belkin rubbing off on Linksys is a far greater concern.

    Cisco is all about commercial stuff, they've never reeeeally put their heart and soul into consumer grade equipment, so it most likely isn't a big market for them, and they're probably not interested in expanding into it. The difference in price between commercial switchgear and consumer stuff is astronomical, and most commercial stuff is upgraded fairly often too, consumer stuff... when it breaks or slows down, or has finally become obsolete.

    Hmm, You Like Belkin? I lost all respect for Belkin when they got caught self reviewing their products and sending their rating through the roof. I will never buy a belkin product now.

      i'd say all the companies do that. just some are better than others.

    had nothing but headaches with a Belkin router. Ended up replacing it with a Netgear DGND3600v2. Ironically the Belkin was replacing a older n150 Netgear. I've never owned a Cisco or linksys router though so I can't comment about those

    linkysys i should say is a worth buy of technology not only it is a user friendly device it also very durable that until my linksys router still works for 4 years now never used their warranty before.

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