News & Analysis
Cisco sells Linksys, ending home networking run
Brian Fuller
1/25/2013 12:01 PM EST
FLAGSTAFF, Ariz.--Belkin said Thursday (Jan. 24) it will acquire
Cisco’s Home Networking Business Unit, which includes the Linksys
products, for an undisclosed sum. The acquisition will
give privately held Belkin, based in Playa Vista, Calif., a 30
percent of the U.S. retail home and small business networking
market.
Currently, Belkin has a range of wired, wireless and powerline networking products under the Belkin brand. Company officials said they will maintain the Linksys brand.
Cisco acquired
Linksys for $500 million almost exactly 10 years ago,
as the networking giant expanded its reach into home-networking.
Specific financial terms of the transaction are undisclosed. The transaction is subject to various standard closing conditions and is expected to close in March 2013.
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Currently, Belkin has a range of wired, wireless and powerline networking products under the Belkin brand. Company officials said they will maintain the Linksys brand.
Cisco acquired
Linksys for $500 million almost exactly 10 years ago,
as the networking giant expanded its reach into home-networking.
The company spent years trying to find its way in the consumer world only to begin to unwind or kill those investments beginning a few years ago, most notably ending production of the popular Flip video camera as smart phones took over that application.
Chet Pipkin, CEO of Belkin said, "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.”Specific financial terms of the transaction are undisclosed. The transaction is subject to various standard closing conditions and is expected to close in March 2013.
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Yog-Sothoth
1/25/2013 12:23 PM EST
What a shame. Belkin makes stuff that appears to have been designed by garden gnomes with software written by cavemen.
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ewertz2
1/29/2013 1:20 AM EST
Yeah, boo hoo. I swore to never buy another Belkin product after they blew me off not compensating me for the junk wireless router I bought from when they lost their big class-action lawsuit a decade ago.
They're one of three companies I'll never do business with again. Oops, four -- I just realized last night that ARCO was part of BP.
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Netteligent
2/14/2013 12:28 PM EST
Belkin is a terrible company with the worst product management and support.
Belkin loves to use "Rebate" trick to buy their products but customers never see their money. Once you cut and send in Serial number on box, Belkin's customers cannot return products or dump in trashcan. Customers were blind but now they can see.
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JAK620
1/25/2013 3:09 PM EST
Oh well... this reminds me of the demise of Compaq...
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JAK620
1/25/2013 3:11 PM EST
I like both Belkin and Linksys brands and their product lines.
I hope that Belkin can do a better job to the Linksys brand than what HP had done to Compaq ...
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eewiz
1/25/2013 10:57 PM EST
Interesting! Is the acquisition just for the brand name? I mean what can Belkin do with Linksys that it currently can't do by itself? Any idea on the valuation?
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GeLy-MyOtherRideIsABMWS1000RRScooter
1/28/2013 10:43 AM EST
I'm guessing a lot less than $500mil that Cisco paid for Linksys, otherwise CSCO would have put out a press release. Maybe well see it on the next Q report.
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chanj
1/28/2013 2:26 PM EST
The consumer market is pretty brutal in general. Profit margin is low. In general, cosmetic drives sales. Yet, technology can't lack behind too much compared to other product of other brands.
Nonetheless, what's the benefit of selling a division worth 30% of US market? What does 30% US market translated to dollars?
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Frank Eory
1/28/2013 4:26 PM EST
$500M paid for Linksys is pocket change compared to the $7B that Cisco paid for Scientific-Atlanta's set-top box business. I remember about a year ago there were rumors that Cisco wanted to sell that business too, but I think all they did was sell the factory in Mexico to Foxconn.
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DrQuine
1/28/2013 7:02 PM EST
On hearing the news, my first thoughts were of the impending monopoly ... but since LinkSys and Belkin were the market leaders a few years ago (in my mind), NetGear, D-Link, Trendnet and many others have become very active. It is interesting that after the transaction Belkin will hold "only" 30% of the market. Does anyone know the market shares / ranking?
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