- January 24, 2013 07:10pm EST
Apparently Cisco CEO John Chambers was pretty serious about dialing back Cisco’s consumer technology portfolio —the company is selling its Linksys home networking business to Belkin.
Belkin said Thursday that it has entered an agreement with Cisco to acquire the latter company’s Home Business Networking Business Unit for an undisclosed sum in a deal expected to close by March.
“We’re very excited about this announcement. Our two organizations share many core beliefs – we have similar beginnings and share a passion for meeting the real needs of our customers through the strengths of an entrepreneurial culture,” Belkin CEO Chet Pipkin said in a statement announcing the deal.
“Belkin’s ultimate goal is to be the global leader in the connected home and wireless networking space and this acquisition is an important step to realizing that vision.”
The privately held, Playa Vista, Calif.-based company said it would “maintain the Linksys brand and will offer support for Linksys products as part of this transaction,” as well as honoring warranties for current Linksys products.
Belkin, a maker of consumer and commercial networking equipment, computer peripherals, and consumer electronics accessories, said the acquisition would give it around 30 percent of the U.S. market for home and small business networking hardware.
“Linksys pioneered wireless connectivity capability around the globe, and has a strong brand renowned for its premium market position, the strength of its installed base and its proven dependability. Linksys users benefit from peace of mind in their home networking environment,” Pipkin said.
Belkin also said it would be developing a “strategic relationship” with Cisco on retail distribution, marketing, and making Cisco’s networking software available on Belkin products.
For Cisco, the move appears to be a major step forward in a strategic shift announced by Chambers in April 2011, when he pledged to “double down” on the company’s enterprise IT focus and promptly shut down Cisco’s Flip camcorder business.
Patrick Moorhead, principal analyst for Moor Insights & Strategy, called the deal “good for both parties” but particularly for Belkin.
“Cisco went on a consumer buying and development spree that ended up in somewhat of a disaster. Products were announced that were overpriced and non-differentiated. Cisco is better off focusing on the commercial market, while Belkin gets a very strong and respected Linksys brand that adds value to their own,” Moorhead said.
Linksys was founded in 1988 and acquired by Cisco in 2003. It’s headquartered in Irvine, Calif. as a division of its parent company, not far from the Southern California offices of Belkin.
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