Cisco retreats from consumer experiment

Cisco, the world’s largest network equipment vendor, is to discontinue a number of consumer technology products as it renews its focus on business technology.

In recent year, the company has diversified into a number of new markets. One of the most pronounced departures was its 2009 acquisition of Pure Digital Technologies, which makes the Flip handheld camcorder device.

But earlier this month, Cisco CEO John Chambers wrote an ‘internal’ memo (which was published on the company’s corporate blog) in which he pledged to strengthen the company’s focus on its core competencies.

"We have disappointed our investors and we have confused our employees," he wrote. "Bottom line, we have lost some of the credibility that is foundational to Cisco’s success – and we must earn it back. It’s time for focus."

Yesterday, the company announced that it will stop making Flip cameras altogether. Analysts believe the once-popular device has been overshadowed by smartphones with video camera functionality.

Cisco will also move the Umi home teleconference division into its business-focused TelePresence department.

Speaking to Information Age in 2009, Cisco UK chief executive Phil Smith argued its combination of business and consumer technology made sense. "Consumer and business technology are increasingly becoming the same thing,” he said at the time. “As a business, you want to understand consumer behaviour, and you want to integrate technologies that are driven by consumers."

Not all Cisco’s diversifications have been failures. In the last financial quarter of 2010, sales of its data centre platform UCS increased 550% year-on-year, the company reported. It said that the number of organisations using UCS reached 2,800 during the quarter. 

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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