John Chambers Officially Gives Up His Dream To Turn Cisco Into A Consumer Brand

Business Insider

As expected, Cisco sold its home wireless router business, Linksys, to Belkin last week for an undisclosed sum.

With that sale, CEO John Chambers' dreams to turn Cisco into a consumer tech company have ended.

Cisco bought Linksys in 2003 for $500 million in stock. The home router market is a competitive, low-margin business that had total revenues of about $350 million to $400 million annually, according to the analysts at Wedbush.

Cisco never broke out revenues on Linksys products. Instead, they are lumped into a business unit it calls "other." In Cisco's most recent quarterly report, revenues for the "other" unit were $220 million, down 11% over the comparable quarter in 2011.

The end of Linksys as part of Cisco is also the end of an era in which Chambers repeatedly tried to diversify Cisco into a company with both consumer and enterprise businesses, with sometimes disastrous results.

The mishaps include:

  • A PR disaster that ensued after Cisco upgraded a bunch of Linksys users to a cloud service without asking them and issued a confusing set of rules for its use. The rules made it sound like the company was monitoring people's Internet usage and outlawing porn on their private home networks.

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