Cisco and Set-top Boxes
The New York Times reports that Cisco will buy Scientific Atlanta, the second largest after Motorola) maker of TV set-top boxes.
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“Video is emerging as the key strategic application in the service provider triple play bundle of consumer entertainment, communication and online services,” John Chambers, Cisco’s president and chief executive officer, said in the statement.
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“One of the nice things about set-top boxes is that they are constantly being overhauled,” said Bruce Leichtman, president of the Leichtman Research Group, which tracks the telecommunications and cable industries. “The cycle never ends.”
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A purchase of Scientific-Atlanta would be a coming-out party of sorts for Cisco as a more consumer-oriented company. The company has been best known for equipment that routes data around the Internet. These so-called routers have turned Cisco, with $24 billion in annual sales, into a bellwether stock.
Cisco made its biggest push into the retail market so far in 2003, when it acquired LinkSys, a big maker of Internet routers for the home, for $500 million.
One question: will Cisco ask Charlie Giancarlo to lead the set-top box business? He already runs LinkSys, Cisco’s other consumer product division.
My hunch says Giancarlo may be the next Chambers. You go, Charlie.