Barron's Eric Savitz blogged that the home networking market of Cisco Linksys has been flat to slightly down for the last four quarters, tumbling 5% in revenue year over year in the most recent Cisco 2nd Quarter.
 Ned Hooper - Cisco Senior Vice President for Corporate Business Development, cites two key transitions that are affecting Linksys.
The first transition is the shift from 802.11g routers to 802.11n. "The transition has taken longer to materialize than we expected," he says. Ned says the switchover should pick up steam as more PC manufacturers pre-install 802.11n into their laptops and printers. |
The second transition is a move from networked home offices to multimedia-enabled homes.
Ned notes that 40%-60% of homes with broadband do not have wireless networks - they are connected to single PCs.
He thinks demand will pick up as more people attempt to network multiple PCs, game consoles, music players and other devices.
Ned notes that the 802.11n standard is key, since it is fast enough to rout video content around the house.
Interesting points learned from the 2nd quarter Cisco earnings conference call:
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First time Cisco missed January forecast in five years. |
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Service provider down 6% in Europe in Q2. |
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Enterprise was solid; orders up 11% year over year. |
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Commercial market orders up 20%. |
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60% of business outside the U.S. |
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Europe orders up 8%. |
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U.S. orders up 12%. |
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Asia Pacific order growth up 23%. |
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Emerging markets grew 24% in orders. |
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Services revenue 16% of total revenue; grew 18% year over year. |
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13 of top 20 products had growth in Q2 of 15% or better. |
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10 product families with orders, revenue above $1 billion. |
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Switching grew 11%. |
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Routing grew 18% revenue year over year. |
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Advanced Technology grew 25%. |
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High-end routing very strong; CRS-1 up 60% year over year. |
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Unified communications, including WebEx, grew 60% year over year. |
| View the entire 2nd quarter Cisco earnings conference call transcript | |
| What do YOU think Ned Hooper omitted regarding the weakness experienced by Cisco Linksys in the home networking market? | |
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What could have impacted sales.
Hello,
Did we happen to look at what is/was actually driving the residential marketplace. The internet and usage of bandwidth on the internet. Since oh 4 or 5 yrs now Europe and north America have realized the cost of bandwidth of ISP's and customers alike. This trickle down effect will definitely cause a problem for sales. Since costs are now being associated with usage for consumers on the internet. So the very slow adoption of this N technology is expected. If the trend of bandwidth shaping and packet inspection and throttling continues you may even have a collapse of the wireless home market. After all most of the new young people information they view and want to view / listen come from the internet these days. Just look hoe the youtube.com site increased sales for high end switches to ISP's in the last couple of years. This along with Solution for inspecting and managing your bandwidth will definitely have an effect on the end customers. It should not be long before ISP's start charging dot_coms for usage on there pipes and if no payment is provided they may just throttle them back as opposed to their competitors. This is all just speculation of course, but one that might be interesting to look at as impacts to the consumer markets (past/present/future).