Cisco Sells Linksys to Belkin

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Cisco has announced plans to sell its Linksys home router business to Belkin for an undisclosed sum. Recently, Cisco has been selling off most of its consumer products like Linksys.

All Things D’s Arik Hesseldahl reported, “Word just hit the wires that Belkin, the company behind numerous consumer accessory products like Web cams, power strips, cables, phone cases and such, just announced that it will buy Cisco’s consumer home networking unit, Linksys. Financial terms aren’t being disclosed, at least not by Belkin as yet, though the price may show up in a Cisco filing sooner or later. However, the company, which has an existing consumer networking business, says the deal will give it a 30 percent foothold in the retail home and small-business networking market, where competitors who come to mind include the likes of Netgear, Apple and D-Link.”

Jeffrey Burt from eWeek noted, “Cisco Systems, which almost two years ago shuttered its profitable Flip video camera unit, is now getting rid of another remnant of its consumer business, selling its Linksys consumer networking unit to Belkin. The deal for the home networking business, announced Jan. 25, is the latest by Cisco in its effort to exit the consumer technology business, part of a larger restructuring of the company that began in 2011. Other victims of Cisco’s purge included the Umi personal telepresence system, which the company ditched in January 2012 after 15 months on the market.”

Bloomberg’s Jordan Robertson added, “Bloomberg News reported in December that Cisco had hired Barclays Plc to find a buyer for Linksys, citing people familiar with the situation. The unit was likely to fetch much less than the $500 million Cisco paid for it in 2003, because it is in a mature consumer business with low margins, said the people. Linksys was a primary component of a Cisco division where sales have fallen 35 percent over the past two years.”

PCMag’s Samara Lynn took a negative view of the sale, writing, “Cisco didn’t even sell its Linksys-branded division of consumer/SOHO networking products to a company that could make the products better. It sold a successful brand of well-designed products to Belkin, which has not been nearly as accomplished at turning out quality wireless routers and other equipment to consumers. In fact, many of the products we’ve tested from Belkin in the last few years have been plagued with less-than-stellar performance issues and software problems…. Bad news, Linksys fans: This move will likely result in the degradation of quality Linksys products.”