Cisco to Sell Linksys: A New Strategy

It has been reported that Cisco is going to be selling off Linksys, a company that makes home networking equipment such as routers and wireless access points.

Cisco bought Linksys back in 2003 for $500 million. This division has since focused on consumer products even though Cisco has mainly been branded for business.

According to the reported rumors, this move is part of a larger strategy for the company whose goal is to leave the customer area completely. This is not the first change for the company; they bought a small camera company with Flip back in 2009 and discontinued the products in 2011.

The Cisco Focus

Back in 2011, Cisco said it had five areas of focus:

• Core routing
• Collaboration
• Video
• Switching and services
• Architectures

Cisco is already seen in data centers and other business areas; this means more money rather than focusing on low-profit consumer electronics.

There is little word yet on who may be interested in picking up Linksys. While it is an established brand, there is very little room for new innovation or changes in revenue. One name that is being linked with the possible sell is Belkin. This company also sells wireless routers so it could be a good fit with a second company and established name. However, it is expected that the buyer will pay less than the purchase price of $500 million.

TV manufacturers may be another possibility because of the technology that Linksys brings with it. Barclays is the financing firm that is supposedly helping find a buyer to complete the sale. While Cisco has not given out financial information for Linksys directly, the division is listed under “other” for revenue for the company. That section was down in sales, which could also influence the sale for Cisco.

[Images via glsen & cisco]