In an interview with The Wall Street Journal, Cisco CEO John Chambers says that he wants to build his router company into a force in the consumer electronics field. That is probably not a good idea.
Chambers reasons that his router business will continue to grow at low double digits for several years. Mostly driven by supplying telecom and cable companies with infrastructure, Cisco made $2.2 billion in its last reported quarter on revenue of $8.9 billion.
But, the company does own the Linksys WiFi product and the Scientific Atlanta set-top business. It hopes to re-brand these with the Cisco name. This would put the company up against the largest set-top provider, Motorola's General Instruments division. It would also put Cisco into the home networking business that has chewed up and spit out companies from Microsoft and Intel. Dozens of companies are trying to make money as the hub of home entertainment and connectivity.
It would be a long and very hard war for Cisco. It should stick to its knitting.
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