Cisco to Acquire Linksys 256
forged writes "The Boston Globe is reporting that networking giant Cisco Systems plans to acquire Linksys later this year for $500M, thus entering the consumer market. Linksys also has a press release. The good news is that those who bought a Linksys access point now have a Cisco access point for 1/2 of the price ;)"
FP! (Score:3, Insightful)
1/2 the price, sure... (Score:4, Insightful)
And 1/4 the quality!
Um... (Score:2, Insightful)
The mind boggles.
- A.P.
In the end just leads to more domination (Score:4, Insightful)
In the end it will probably just help create a new MS-like giant. I've never been a fan av any kind of corporate giant.
Buy them to kill them... (Score:4, Insightful)
This Sucks!!! (Score:5, Insightful)
I like LinkSys products because they are functional and cheap. Ciscos products are functional, robust but not cheap. I guess Cisco is getting scared of the competition, and decided to crush them...
Ah, like when Nvidia bought 3DFX? (Score:2, Insightful)
Just me, the Voodoo owner... yes yes... I can and will write my own freaking drivers *grin*
The real difference (Score:5, Insightful)
Linksys:Easy to configure, not very configurable
Re:Expect a price hike for Linksys equipment (Score:5, Insightful)
That doesn't make any sense. If Cisco raised the prices by 50%, then the Linksys stuff WOULD compete with Cisco, since they'll now be in similar price categories. How on earth is Cisco going to differentiate Linksys vs Cisco if this occurs? Makes more sense that Linksys continues to be the low price option and Cisco to be the corp. higher price option. Remember, Linksys is in the consumer market, Cisco almost exclusively in the corporate. Linksys would get killed by the Netgears and SMC's of the world with such a price hike.
Ultimately Bad (Score:5, Insightful)
First of all, Cisco now has a lot more to worry about, and they've have lot to worry about lately what with their stock prices fluctuating and a slowly decreasing demand for networking hardware as more and more IT firms belly up and more of the ones who stay in business consolodating their IT servies through hosting firms and the like.
The consumer hardware market is *very* low margin. There's a reason that they call this stuff 'Commodity' hardware... including networking hardware. If Cisco has to play the commodity hardware game for long, they're going to start feeling like having a company come buy them out as well.
Second, the number of players in the networking field keeps getting fewer and fewer. This seems like a good thing for the companies-- they don't have to compete as hard or do as much R&D to stay at the top. What this means for them in the long run, however, is that they become less able to deal with business crises and the advent of new tech. Just look at the way wireless is taking off right now. If you think this technology is done by a long shot or that there aren't new companies sprining up to exploit it, you should study it a little more. Sooner or later there will be a 'powerhouse' company spring up for an aspect of networking that's troublesome for Cisco, and then they'll have problems keeping up and staying competitive if they cut back right now at all.
Re:Expect a price hike for Linksys equipment (Score:4, Insightful)
Re:Expect a price hike for Linksys equipment (Score:3, Insightful)
No.
Cisco will continue to sell it's business-side stuff AND now home-use stuff as well.
Re:Is Cisco the new Microsoft? (Score:5, Insightful)
At least I still have the copies that I downloaded several months ago...
no change or cheaper products. (Score:5, Insightful)
Re:Ah, like when Nvidia bought 3DFX? (Score:2, Insightful)
3DFX made stupid moves, went belly up, and then had its technology bought.
Linksys has good market share in the consumer market and is doing well.
Re:Sweet! (Score:5, Insightful)
It's the (smart) Walmart way... (Score:5, Insightful)
The reason I say it's the Walmart way is because Walmart provides just about everything you can think of that is smaller than a car - some of the Walmarts where I live actually have the Walmart Appliance section. Walmart sells clothing, food, tools, etc.
Most individuals looking for high quality (cost) goods will not be purchasing their designer fashions at Walmart. Instead, they choose to go to Dillards, Parisians, Eddie Bauer, and other higher quality - smaller customer base distributors. Yet, when you look at it in the end - who makes the most money (by a huge margin)? You guessed it - Walmart.
The vast majority of consumers are middle-class to lower-class individuals. Many companies that have taken a huge beating in the market place are looking for cost cutting measures. 40 Linksys switches or 10 Cisco switches for the same cost? The "Linksys line by Cisco" would be like the "Great Value" Walmart brand. The Cisco native branded equipment, I would imagine, would be for the people who still want to shop at Eddie Bauer, etc.
Linksys is a highly popular choice for cable companies who provide their broadband service because it's extraordinarily cheap with a pretty decent track record. Cisco acquires not only Linksys, but its existing relationship with all of the companies who buy Linksys equipment in bulk. As a result, Cisco gains market share into an arena it previously untapped venture without having to invest the capital to pursue moving into an already crowded arena.
I would imagine the Linksys brand name would stay around for quite a while (much like the legacy of USRobotics when purchased by 3Com) to diversify the two segments of the company for marketing purposes.
The only caveat to this acquisition is the fact that it was a purchase of another company. Many companies which made acquisitions before the dot-bomb crash did not efficiently integrate the companies, and they ended up either being dead-weights or misused to the point of extinction. Only time will tell.
Re:1/2 the price, sure... (Score:5, Insightful)
People have bought into Wireless. People have bought into broadband routers, and SOHO firewall appliances. The home networking market is exploding, and Cisco can no longer afford to ignore it as a means of adding to their bottom line.
Besides, who doesn't love the WET-11?
Re:Buy them to kill them... (Score:4, Insightful)
I do not think they are trying to put them out of the market but trying to offer a Cisco product line that meets all needs from bottom to top. In the enterprise world, most purchases are done because you already have an existing companies product so why not buy them for everything. Hell, I'd bet most large companies would seriously consider Cisco PC's or heaven forbid Microsoft business class routers and switches if they were offered.
Most companies do not selectively choose individual lines unless they have too. It is not surprising to see Compaq servers, Compaq san's, Compaq tape backups, and Compaq PC's and laptops on every desk and server room in a corporate environment.
UP, not down. (Score:2, Insightful)
Re:Sweet! (Score:1, Insightful)
Re:Maybe Lynksys can support another platform! (Score:2, Insightful)
At least they are doing something they're good at. (Score:4, Insightful)
The biggest news here is that cisco will finally be able to enter a complete solution into the content delivery market. A company can provide online content with massive high-end cisco name brand stuff, and use the acquired linksys stuff to give them the other end of the pipeline as a complete package.
As more local telco companies are looking at providing high-speed internet access, this becomes very interesting indeed.
Re:And the bad news... (Score:2, Insightful)
And I just picked up a Siemens 4 port 10/100 router for $30. The 2 port version a friend bought was even $19.95.
Given the profit Office Depot makes and the shipping costs all the way from China, I'm wondering if Cisco knows how to make money on products that can not cost more than 2-5 dollar "out of the factory".
Manager: Jeff, your bonus for the 1st quarter is $ 2.95
I work in Wireless Networking... (Score:5, Insightful)
You want something cheap, attractive and easy to setup and use. For those knocking Linksys quality, allow me to let you in on a little secret...they are the best. In the home networking, wireless networking business, Linksys gear rules.
Now yes, I work in wireless networking...but guess what, I don't work for Linksys or Cisco. I work for one of their competitors. Despite my strong sense of company loyalty, I'll still admit freely that Cisco equipment is the best for Corporate networks (duh) and Linksys equipment is the best for Home Networks. People with Home Networks don't care about firewalls, security, layering and routing, they just want their 3 computers online at the same time, with a high speed connection.
btw, before anyone puts words in my mouth. I tried to stress that Linksys has the best quality gear...and they do. I didn't say anything about their tech support, which is "lacking".
Craenor
Re:This Sucks!!! (Score:3, Insightful)
When Joe Sixport decides to buy a DSL connection, paying for a single computer, then hooking up his wife and kids on a LAN with a cheap little LinkSys, Cisco's big customer, the DSL provider gets stiffed. So Cisco's ability to grossly overcharge for hardware is undermined.
So when home routers triple in price to where Joe Sixport can no longer afford them, the DSL company wins, and Cisco also wins. They won't be selling home routers at 5% profit. They'll be selling huge routers to corporations at 50% profit.
Re:This Sucks!!! (Score:3, Insightful)
Cisco definitly sees this as a stategic buy, but that does not mean they will screw it up, or that they are not going purposly kill off thier product line.
There are a other vendors out their for this type of product, but Cisco grabbed the biggest. Of course they want to stear buisness thier way. But they may not be doing it the way that would make sence to us (the general geek public). They could end up killing LinkSys off since they are the largest name out there, and drive more biz to thier brand (which is more expensive).
The law of supply and demand works here, they are just removing some of the supply.
Cisco does not like the cheaper alternative because it will find its way into bigger buisness frm the SOHO market. I use these products all the time for my clients. Most of my clients have no need for cisco brands when a linksys will do quite nicely thank you very much. Cisco is threatened by this. I do not want to pay a premium for a brand name widget when I can get two cheaper widgets for the same cost. If one widget fails I use the other and I'm still a head of the game.
Yup, Cisco is in the money making biz, so "Why would csco break a money making machine that works well"? They want to redirect the linksys biz to thier brand which will increase market share. And as a bonus they can charge more for thier brand. They could care less if the customers get the same value for thier money, they just want the money. Thats why.
I guess I will be buying D-Link from now on...